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The Preacherman

Retailers go into administration

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News of yet more retailers in trouble.

Greenwoods menswear firm, which has a branch in Worcester, on the Shambles, goes into administration http://www.worcesternews.co.uk/news/15538447.Greenwoods_menswear_firm_goes_into_administration/?ref=mr&lp=6

 

Just for Pets jobs in Bromsgrove and Northfield at risk as company verges on administration https://bromsgrovestandard.co.uk/news/just-for-pets-jobs-in-bromsgrove-and-northfield-at-risk-as-company-verges-on-administration/

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I see what you did there.

I was just about to say the same/ looks like they didn't cut their cloth to suit their measure. Ahem. 

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When i started my import business Pet supplies were my first products.I got out of them a couple of years ago as the illegal chinese sellers now import direct into other Chinese owned warehouses in/near Felixstowe.They understate the value of the goods on the container with dodgy invoices saving VAT and import duty,then claim to be a UK seller based above a shop in Manchester (alongside perhaps 100 others) and so avoid all VAT they should pay as outside the EU sellers.(they then export some to the EU to avoid VAT there as well,hence why the EU claims the UK is doing nothing about the massive fraud,they are right).

The UK government answer to all this is to do nothing and to instead let councils hounds legal business for more tax to pay for their gold plated pensions.

As i scan across huge numbers of products with prices people will pay compared to costs now just on buying (crap pound),importing,storing there are tiny margins.Thats before any staff costs,rates,etc etc.

Expect carnage in the sector early next year.

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Confidence in High Street Retail is rock bottom in the age of the internet shopping. I can see many more Greenwoods' in the coming months. Debenhams' stock price is an example of just how low confidence is.....a yield of 8.25%, price to earnings of less than 6 and a price to book of 58%. This is no BHS, it has no pension deficit and a fairly low leveraged balance sheet at 40% debt ratio.  But it is hobbled with a lot of enormous stores in city centres on long leases, and the Market is betting it wont be around in decades to come, at least in the same form.

 

http://shares.telegraph.co.uk/fundamentals/?epic=DEB

Edited by crashmonitor

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I believe 13 percent of debenhams shares are shorted, which doesnt suggest much faith in the company, although mike ashley has used the low price to fill his boots. I am surprised greenwoods hasnt gone bust already, not much money to be made from older men who might buy a pair of farah slacks from them every other year when the old ones fall to pieces or their wives complain. 

So far only low rent companies like woolworths and BHS have gone bump. If something previously considered blue chip gets into serious trouble there will be panic in the markets.

 

 

 

 

 

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8 hours ago, nothernsoul said:

I believe 13 percent of debenhams shares are shorted, which doesnt suggest much faith in the company, although mike ashley has used the low price to fill his boots. I am surprised greenwoods hasnt gone bust already, not much money to be made from older men who might buy a pair of farah slacks from them every other year when the old ones fall to pieces or their wives complain. 

So far only low rent companies like woolworths and BHS have gone bump. If something previously considered blue chip gets into serious trouble there will be panic in the markets.

Short interest isn't a guarantee of direction of travel.

13 hours ago, durhamborn said:

When i started my import business Pet supplies were my first products.I got out of them a couple of years ago as the illegal chinese sellers now import direct into other Chinese owned warehouses in/near Felixstowe.They understate the value of the goods on the container with dodgy invoices saving VAT and import duty,then claim to be a UK seller based above a shop in Manchester (alongside perhaps 100 others) and so avoid all VAT they should pay as outside the EU sellers.(they then export some to the EU to avoid VAT there as well,hence why the EU claims the UK is doing nothing about the massive fraud,they are right).

The UK government answer to all this is to do nothing and to instead let councils hounds legal business for more tax to pay for their gold plated pensions.

As i scan across huge numbers of products with prices people will pay compared to costs now just on buying (crap pound),importing,storing there are tiny margins.Thats before any staff costs,rates,etc etc.

Expect carnage in the sector early next year.

Therein lies the problem.How do you fight margin compression whilst paying higher taxes?

 

You don't.

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21 hours ago, durhamborn said:

As i scan across huge numbers of products with prices people will pay compared to costs now just on buying (crap pound),importing,storing there are tiny margins.Thats before any staff costs,rates,etc etc.

Expect carnage in the sector early next year.

Have to agree. To compete retailers have to look comparable with online retailers like amazon on pricing. 

I was in a local guitar shop for the first time in ten years looking for a guitar for my son. I expected them to be a place to kick the tyres of guitars but to buy online to buy cheaper but that simply wasnt true. The prices were genuinely less than they were in 1996 when i was in music shops every weekend. No chance then of buying a decent starter electric guitar for £80 quid or a set of strings for £3.50. In fact my guitar was £650 when i bought it and 21 years later it would still have been have been the 3rd or 4th most expensive guitar in the shop at that price not making any effort to account for inflation. 

In the same period of time i cant think of any other retail segment except perhaps computing where prices have done that. Cars for example will have virtually trebled in price in 21 years, as for freddo frogs....

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1 hour ago, regprentice said:

Have to agree. To compete retailers have to look comparable with online retailers like amazon on pricing. 

I was in a local guitar shop for the first time in ten years looking for a guitar for my son. I expected them to be a place to kick the tyres of guitars but to buy online to buy cheaper but that simply wasnt true. The prices were genuinely less than they were in 1996 when i was in music shops every weekend. No chance then of buying a decent starter electric guitar for £80 quid or a set of strings for £3.50. In fact my guitar was £650 when i bought it and 21 years later it would still have been have been the 3rd or 4th most expensive guitar in the shop at that price not making any effort to account for inflation. 

In the same period of time i cant think of any other retail segment except perhaps computing where prices have done that. Cars for example will have virtually trebled in price in 21 years, as for freddo frogs....

Problem is now online has reached the point of tiny margins.Thats a lot to do with Amazons fees of course.I can still make decent margins on my webbie.The knack is driving traffic there from Amazon (and now the best place to drive traffic instagram).What we are seeing is every area of product has far too many sellers with no gaps.Because of cheap debt people are clinging on who should of gone under.Those bozos at the Central Banks by stopping business cycles ending in the short term have created a zombie economy.You cant invest as the returns arent there.

As for Amazon itself.Probably reached the high water mark.Its cost structure isnt very good.If google and Facebook got their acts together they could hit Amazon hard.

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3 hours ago, regprentice said:

Have to agree. To compete retailers have to look comparable with online retailers like amazon on pricing. 

I was in a local guitar shop for the first time in ten years looking for a guitar for my son. I expected them to be a place to kick the tyres of guitars but to buy online to buy cheaper but that simply wasnt true. The prices were genuinely less than they were in 1996 when i was in music shops every weekend. No chance then of buying a decent starter electric guitar for £80 quid or a set of strings for £3.50. In fact my guitar was £650 when i bought it and 21 years later it would still have been have been the 3rd or 4th most expensive guitar in the shop at that price not making any effort to account for inflation. 

In the same period of time i cant think of any other retail segment except perhaps computing where prices have done that. Cars for example will have virtually trebled in price in 21 years, as for freddo frogs....

 

Here's what's going on:

https://www.thestreet.com/story/14280618/1/gibson-guitar-may-default-if-company-can-t-refinance-its-debt.html

 

TL;DR: lots of debt. 

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Lots of big household named firms have intentionally loaded themselves up with debt......but they still require  customers, indebted customers and customers with available credit.....fast changing world, can't afford to stand still and expect things to remain the same.;)

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  • 298 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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