Sunday, January 24, 2010
Previous post outlined major US brands leaving american consumers after decades of market operations. Additional polls have been undertaken and thanks to many several other US brands facing similar fate have been named: Gottschalks, Goody’s, Hummer, Rocky Mountain News and Home Depot Expo. As promised, below is presented an analysis of major UK brands we lost in Credit Crunch, followed in the next post by EU Market.
According to financial analysts more than 3,000 UK firms have collapsed into administration last year under the pressure of soaring costs, falling consumer spending and finally the credit crunch.
1. When asked which are major UK brands left behind in recession almost all interviewers pointed firstly at Woolworths:
100-year-old High Street legend Woolworths has buckled under its debt (£385m) closing its 807 stores and leading to over 22000 job losses across the UK. While major news portals such as BBC declare that the store chain has been already in difficulties for years, losing market share against intense competition - on the other hand consumers blame the chain for being highly disorganized "selling a bit of everything" and thus, becomming "outdated". Which opinion is close to your own? Take part in our related poll to express your own view.
The company's weak position was also the reason why the government did not intervene to rescue it. Today Woolworths experiences its 2nd life online - under a Shop Direct umbrella, being part of the Littlewoods group. The firm denied it was "playing on the nostalgia" of the old chain, which opened its first UK shop one hundred years ago in 1909.
Over 1,350 members of stuff have been made redundant at MFI after the furniture chain called in administrators. It collapsed just hours after Woolworths confirmed it had gone into administration, closing its 110 stores. Major reasons for the company failure were mentioned: severe cash flow pressure as a result of credit insurance being withdrawn across the sector and the failure of certain key suppliers (acc. to MFI statement in Times Online).
The collapse of wedding gift firm Wrapit selling around 3000 wedding gifts a year was one of the most notorious high-profile administrations. Around 2000 distraught couples were left chasing up undelivered presents and over 100 000 guests are thought to have lost money claiming compensation. The company owed £3.5m to its main creditor HSBC and have never made any money in six years of trading, according to KPMG spokesperson.
The 86-year-old curtains and home furnishings chain Rosebys went through a painful sale and break-up process after it was placed into administration in September 2008.
The firm suffered from major UK property slump and high street spending squeeze. It owed trade creditors around £11.7m and inter-company creditors £19m at the time of its administration.
5. Coffee Republic:
After weeks of intense speculation, the coffee chain Coffee Republic announced its failure on July 8th, 2009 (acc. to Thefirstpost.co.uk). It was founded in 1995 by the brother and sister team Bobby and Sahar Hashemi in central London and became a regular fixture on the high street, with 187 outlets in the UK and abroad. The company's shares were suspended at 22p after being worth as much as 160p two years ago.
6. Joe Bloggs Clothing:
According to The Independent: Shami Ahmed, the founder of Joe Bloggs and fashion tycoon whose baggy jeans became the uniform of Madchester's rave scene, has been forced into personal bankruptcy by spread betting firms chasing him for millions of pounds owed in gambling debts. He now faces a battle with his former bookies over remaining assets.
7. XL Leisure:
By the end of 2008 UK’s third largest tour operator collapsed in the face of record oil prices,being unable to raise further funding. It is thought that XL had total debts of £400m when it went into administration.
Business-class only airline Silverjet was brought to its knees by the oil price bubble - similar reasons faced by the previously described brand, ceasing its operations in May, 2008. Around 7,000 UK and 2,500 non-UK passengers were affected when it was forced to suspend services and placed into administration. The Luton-based carrier’s collapse came just over a year after its launch.
At no doubt the list may go on and would be interesting finding out what other major UK brands you remeber leaving the market grounds?
Also, do you feel any regrets related to the "faded" brands?
Catch up our next issues on Major Recession Victims on the EU market. Suggestions and comments welcome!
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