Bye Bye BHS and Austin Reed?

[Justayellowbadge]

21TonyK said:

TankRizzo said:

ukbabz said:

£101million profit last year (2015) according to Wikipedia - https://en.wikipedia.org/wiki/WHSmith

Amazing, what do they do that other, more efficient, firms don't?

Think about where you see WH Smiths. Airports, service stations, train stations, unopposed stores with a captive market. Clever move getting off the high street.

Even when the high st was better for them, WHS really counted as the distribution network for books,papers and magazines.

[vonuber]

Wait a second, over £400 million in dividends to his wife largely financed by debt? No surprise it's gone under - absolutely disgusting.

[FiF]

Yet the accounts were given a clean bill of health, signed off and unqualified. Fails to point out obvious follow up topical comment.

[ch108]

BHS in my town has a 3 floor shop, which is always deserted. I went in once and left after 5 minutes. I think I was looking for shirts for work. I left empty handed. Their stock seemed a bit old fashioned, and not particularly competitively priced compared to Debenhams or Next. The shop itself looks a bit drab, a bit 1970s. I expected to see Mrs. Slocombe and Mr. Humphreys working there.

Debenhams on the other hand seems to do rather well. Their store is always fairly busy. It probably helps it has 2 main entrances at either end of the shop, so they get through traffic, folk using it as a shortcut that may just stop and buy something.

WH Smith still has a store in our local shopping centre. Seems to be mainly OAPs buying newspapers and chocolate bars. The post office is on their upstairs floor. Again creates footfall into the shop I suppose. But could they go the same way as Woolworths? They seem to be a jack of all trades. They stock greetings cards, but probably not a big or cheap enough range to compete with the Card Factory or Clintons. They stock stationery but nothing the local Poundland won't have. And upstairs next to the post office they have some books, CDs & DVDs. Yet Waterstones and HMV always seem to be busier and have more choice. Possibly their airport and railway station shops do better than any of their remaining high street ones.

[vonuber]

FiF said:

Yet the accounts were given a clean bill of health, signed off and unqualified. Fails to point out obvious follow up topical comment.

And? Just because PWC signed the accounts off doesn't mean that extracting so much cash from a business that isn't making that money in the first place, and thus has to be saddled with such a debt is an example of anything good is it? I'm sure the workers of BHS are delighted it was signed off.

[C.A.R.]

Used to go into BHS at Christmas to browse their cheap gifts and stocking fillers. Last two years their selection has gotten smaller and smaller, to the point where it only occupied a small corner of the store. The stock that was there wasn't unique to BHS like you used to find a few years ago, and the pricing was bizarre.

The other thing which really struck me was how quickly they rid themselves of their Christmas stock, I remember darting in to the local store on Christmas Eve to get a gift for a distant relative I don't particularly like, only to find what little remained had already been moved - demoted to a small island and heavily discounted. They had put back aisles of clothes for pensioners in the previous spot. It rather begged the question as to what point there was in being open on Christmas Eve and presumably all the wages that come with doing that.

[FiF]

vonuber said:

FiF said:

Yet the accounts were given a clean bill of health, signed off and unqualified. Fails to point out obvious follow up topical comment.

And? Just because PWC signed the accounts off doesn't mean that extracting so much cash from a business that isn't making that money in the first place, and thus has to be saddled with such a debt is an example of anything good is it? I'm sure the workers of BHS are delighted it was signed off.

It was an oblique poke at the EU accounts. Obviously it fell on stony ground.

[Welshbeef]

vonuber said:

Wait a second, over £400 million in dividends to his wife largely financed by debt? No surprise it's gone under - absolutely disgusting.

And what's the pension deficit--- £500m so Mr Green really is on the hook for destroying this company and he tried to pass it onto another owner to hopefully suck it up and let the workforce suffer.

[RottenIcons]

The figure doing the rounds earlier today was £555million, now it looks like over 600million?!?!? and a huge amount of that money borrowed on the property portfolio. Rumour right now is that BHS has less than nothing as assets, much less than nothing.

[Smollet]

Says it all
http://www.thedailymash.co.uk/news/business/bhs-sa...

[FiF]

Smollet said:

Says it all
http://www.thedailymash.co.uk/news/business/bhs-sa...

Quite partial to a hot toasted pikelet.

[johnfm]

Quite a few unsubstantiated claims on this thread.

We have no idea yet what the cause of the pensions deficit is. Post-Maxwell, I find it hard to imagine Green was unlawfully siphoning funds from it with fraudulent transactions as per Maxwell.

I think I will await some form of evidence before allowing my knee to jerk in Angela Eagle-esque fashion.

[Cobnapint]

ukbabz said:

£101million profit last year (2015) according to Wikipedia - https://en.wikipedia.org/wiki/WHSmith

http://news.sky.com/story/1685272/austin-reed-collapse-puts-1000-jobs-at-risk

Edited by Cobnapint on Tuesday 26th April 11:46

[The Don of Croy]

Lampshades.

BHS were good for lighting (since Habitat left town) and the 'shades were good value.

Have had no cause to look at their clothing...says it all. Is Dunn & Co still going?

[tuffer]

Austin Reed in Canary Wharf closed today, doors locked and a notice posted from Landlord saying no unauthorised access.

[walm]

What I find very odd is that he was allowed to sell the enterprise for £1.
Surely if the pension trustees were OK with that arrangement, then they don't really have any comeback do they?

The trustee is claiming that the pension hasn't got much worse since the £1 sale, so really it would be their fault for accepting this inexperienced bloke (Chappell) to run the business in the first place??

Unless Green somehow lied about the state of the pension and the trustees missed it, then financially he hasn't done anything wrong.

Sure he is going to face a huge backlash and pressure to contribute (hence he is already talking numbers) but I am not 100% sure he has done something as heinous as the press make out.

Isn't this like selling a car and then the owner coming back to you and saying "sorry I crashed it, can I have my money back?"

[gumshoe]

johnfm said:

Quite a few unsubstantiated claims on this thread.

We have no idea yet what the cause of the pensions deficit is. Post-Maxwell, I find it hard to imagine Green was unlawfully siphoning funds from it with fraudulent transactions as per Maxwell.

I think I will await some form of evidence before allowing my knee to jerk in Angela Eagle-esque fashion.

The bits that are known are the Green paid his wife near near enough £900m as a dividend, from a company that did not have the profits to allow for that.

It was in fact from a £1 billion loan taken from HBOS. No tax was paid on the dividends by Green or the company and this plunged the company into an insolvent position (800 odd millions insolvent).

But it was all allowed to happen, HBOS sanctioned it, HMRC knew about it and allowed it. Yet anyone else it would have been considered an illegal dividend.

[walm]

gumshoe said:

The bits that are known are the Green paid his wife near near enough £900m as a dividend, from a company that did not have the profits to allow for that.

It was in fact from a £1 billion loan taken from HBOS. No tax was paid on the dividends by Green or the company and this plunged the company into an insolvent position (800 odd millions insolvent).

But it was all allowed to happen, HBOS sanctioned it, HMRC knew about it and allowed it. Yet anyone else it would have been considered an illegal dividend.

I don't think that is anything like "known".

You don't necessarily pay divs from the simple annual profits - you can build up a distributable reserve over time rather than do it annually.

The tax situation is fine - she is offshore.

And once again, if the company was £800m "insolvent" - why would the pension trustee allow someone to buy it for £1??

You can quite happily trade with £800m in net debt, just as long as you have the income to cover the interest payments.

Would love to know how you came to the £800m insolvent figure.

[chimster]

walm said:

What I find very odd is that he was allowed to sell the enterprise for £1.
Surely if the pension trustees were OK with that arrangement, then they don't really have any comeback do they?

The trustee is claiming that the pension hasn't got much worse since the £1 sale, so really it would be their fault for accepting this inexperienced bloke (Chappell) to run the business in the first place??

Unless Green somehow lied about the state of the pension and the trustees missed it, then financially he hasn't done anything wrong.

Sure he is going to face a huge backlash and pressure to contribute (hence he is already talking numbers) but I am not 100% sure he has done something as heinous as the press make out.

Isn't this like selling a car and then the owner coming back to you and saying "sorry I crashed it, can I have my money back?"

Trustees fault for who SPG sold the business to? What strange thinking.

[RottenIcons]

johnfm said:

Quite a few unsubstantiated claims on this thread.

We have no idea yet what the cause of the pensions deficit is. Post-Maxwell, I find it hard to imagine Green was unlawfully siphoning funds from it with fraudulent transactions as per Maxwell.

I think I will await some form of evidence before allowing my knee to jerk in Angela Eagle-esque fashion.

Absolutely.

For the largest part these deficits are novational and based on a rather dodgy projection formula, so it is not what it appears.

Novational; the PPF system is in effect simply an insurance based liability and the £571m is what the insurers considers missing if Insurance policies replaced the existing investments, some of which will be the ongoing BHS business which is effectively dead, so that will always have a novational loss attached to it. So to some extent a goodly part of the loss is down to the loss of a projected income which has gone as the business has folded.

The dodgy projections; this is all about interest rates and it is literally no different to reading tea leaves, feeling the bumps on someone's head or buying a chrystal ball and giving yourself a big up as a forecaster. At the moment we've enjoyed/endured a period of astoundingly low interest rates, it means that to keep paying out the monthly Pension liabilities there is little or no growth of the capital sum, so when projections are made the picture is very grim, but it does rely on very low rates of return for a continued period.


Aside:- The reason for this falsely low interest rate (it really is a false figure) is due to that awful period when the BoE used an internal Financial Vehicle to conjure up the money for the Quantitive easing fiasco (it is an ongoing fiasco, which like PFI will come back to tear a chunk out of our arris's later) By using fiat money through a further body within the BoE we are left with a payback requirement that relies entirely on the base rate being fiddled to as low as possible, to avoid the vehicle acquiring 'a life of it's own' because although the money is/was virtual it did flow into accounts, peoples accounts, or rather business accounts, in real terms this fantasy money accounts for about 20% of the cash in every business account with a positive balance, and the vehicle is charging interest on that money, the fiat money is fake, the interest is not, 80% of the interest charged is real money taken out of the daily cash flow of various money types. In effect there is real money paying the interest on fake money. it is a formula for financial ruin and ruin is inevitable. The problem is the run-off or more properly up-flow of money to the vehicle. On paper the money is spirited away, but the reality is that it creates right at the heart of our finances a deflationary spiral, it's there right now. We see prices staying the same on manufactured goods, grown or live goods growing in cost and service costs (banks etc) growing like topsy, we all see the latter in the price of everything that the state does and charges for. This model is the worst sort of solution for our woes post 2007/8, why we did it is another matter and it shames us all.

Edited by RottenIcons on Tuesday 26th April 12:11