Wittards of Chelsea Gone Bust

mizzbiz

Old_Slaphead wrote: »

Would miss ?

Presumably it's only a matter of time before it gets subsumed into the great Holland and Barratt corporate machine......assuming H&B can survive the High Street carnage.

A few years ago I didn't think H&B would survive. I used to work for them as a Saturday assistant about twelve years ago and at the time, all the new, generic health stores were emerging and making a real dent in H&B's profits. I've watched them survive purely by being the only place you can get certain things and the feeling that the goods are of a superior quality to say Health Rack, for example. Not only that, but they've discouted hugely, their sales are massive, so they really managed to move and yet retain their market position.

I think if they were to reduce the cost of their food side, they would absolutely survive this recession. Bulgar wheat and pumpkin seeds are no longer niche!

[Deleted User]

It is actually on the brink. Maybe they will get a handout, like jaguar, after all sauce for the goose etc

withabix

A lot of Baugur's brands have been turned around by them and will be snapped up cheaply by other companies even in the current economic climate.

I don't expect Whittards will close - the predictions seem to be that they will go into 'prepack' administration as a vehicle for them to be bought out of administration by someone else at very little cost.

Unlike Woolworths, which no longer had a reason to exist, Whittards doesn't really have any high street competition. Someone will see the opportunity.

House of Fraser seems to be more popular these days - again they have grown in Baugur's ownership by taking over other department stores, have cleared out the warehouses of old stock and aren't just full of their own brand stuff like Debenhams are.

By the way, Administration is not necessarily the same as 'going bust'.

Companies in Administration can legally continue to trade and many do, sometimes for years. Some compnies go into Administration even when trading fairly successfully - it's just that whoever owns them does not want to continue the operation and has not been able to find anyone to buy the company.

Companies that 'go bust' are insolvent and cannot legally continue to trade. XL Travel, Zoom Airlines are recent examples of this.

I don't know the facts, but Whittards retail shops may actually be trading profitably. Sometimes it is the distribution and head office functions which waste all the money. So, someone with compatible operations might see Whittards shops as an opportunity.

withabix

kittie wrote: »

It is actually on the brink. Maybe they will get a handout, like jaguar, after all sauce for the goose etc

I doubt it!

The reason that it's a sensible idea to keep the car manufacturers afloat is mainly to do with the number of employees in the extensive supply chain involved. The car manufacturers are a bit like the bit of the iceberg sticking up out of the sea - the much larger bit you can't see is much more important.

Mathsguy

Whittards has not entered administration yet or 'has gone bust'. You should be very careful what you say on public forums about companies, particuarly sensitive topics like that as you (and the board) could be sued for libel.

vivatifosi

Have been having a think about this and my thought is that there are three types of retail business that are more likely to go into administration or change hands. Here's my theory:

The first group is retailers that were owned by Icelandic parents. I had a look at Icelandic investments in the UK earlier this year and they fell mostly into two fields: retail and finance. Some of these are sound businesses fundamentally but may need to find a new home under a different parent (or say as an MBO).

The second group is those that were already struggling prior to this quarter. This could include companies that had expanded too quickly anticipating the upward trend would never tail or turn, or who just found themselves in the wrong position to start with. Some retailers were filing poor results before this quarter, others had other elements that would be a strain - such as high gearing - to start with.

My final group that will be hit will be those in which there is a massive change in consumer sentiment. These could be sound businesses with good fundamentals, but the tide turns against them. They could also be caught in the middle of a change in the way their industry is structured. Here I'm thinking of companies like car dealerships where the industry is undergoing a structural shift anyway, and this is now coupled with a rapid fall in sales.

mizzbiz

Mathsguy wrote: »

Whittards has not entered administration yet or 'has gone bust'. You should be very careful what you say on public forums about companies, particuarly sensitive topics like that as you (and the board) could be sued for libel.

If anything it should give them a takings boost as the bargain-hunter footfall rises! It's a common ply of shops to advertise bargains just to draw people in, in the hope that they'll buy a few more things 'since they're already there'

You are correct though..... it's a bit iffy announcing news that doesn't exist. Wonder how the red tops get away with it!

withabix

Mathsguy wrote: »

You should be very careful what you say on public forums about companies, particuarly sensitive topics like that as you (and the board) could be sued for libel.

BBC News isn't exactly helping matters!

Maybe Robert Peston fancies buying Whittards....:rolleyes:

vivatifosi

That's a fair point Withabix, it is on both news channels today and with even the FT saying that Ernst and Young are lined up as administrators, I don't think anything we say here will make a difference, we're just discussing what we've already heard.

However, as you and Mathsguy say, they haven't gone into administration as yet and companies can still trade in administration while a buyer is sought, and we should be clear on that.

mitchaa

zarazara wrote: »

I think M&S , Waterstones, Next, TK Maxx, Clarkes shoes, Zavvi, JJB Sport,B&Q.

Can i have some of what you are smoking please;)

Did you just think of any company you could think of and put them in your list?:rolleyes:

2 of the biggest companies we have in the UK listed there, not a hope in hell they will go under.

Any particular reason as to your thoughts? Every time i have set foot in either, the shops have been heaving.

Talking of Markies and Next.