It would seem another large company has failed. Palmer & Harvey, a major UK wholesaler has gone into administration following failed rescue talks. The company has employed 3,400 people and now 2,500 of them will lose their jobs with immediate effect. The 900 remaining will close the company down with the help of PwC, the administrators.
Who are they?
P&H is the biggest supplier of tobacco in the UK but they have been struggling with debts and have owed substantial sums to key suppliers. It is the UK’s 5th biggest privately owned firm and delivers more than 12,000 products and alcohol to major chains, convenience stores, corner shops and petrol station forecourts in the UK.
Palmer & Harvey were in takeover talks with a private equity firm called Carlyle, but the talks failed. PwC has said that the group had been “hit by challenging trading conditions in recent months and efforts to restructure the business have been unsuccessful. This has resulted in cash flow pressures and it has not been possible to secure additional funding to support the business."
One of their customers, Costcutter Supermarkets has said they are now looking for new suppliers. Their contingency plan is to find alternate suppliers either regionally or nationally. Japan Tobacco International, who supply Palmer & Harvey extended a loan in a bid to support the struggling business whilst they were in discussion with Carlyle. Unfortunately for JTI they at best will either wait for payment or risk never recouping what is owed to them.
JTI said it had been informed on Tuesday that the company had "unfortunately entered administration. Throughout the whole process, JTI has worked continuously to facilitate a constructive solution to the P&H Group's challenges including extending significant financial and operational support to allow P&H to continue its operations. Regrettably, our considerable efforts were not successful. We have a contingency plan in place and we do not expect any significant interruption in the supply of our products"
These are very uncertain and unpredictable times for many businesses. Credit insurance is a solution to protect your business and to be on the ball when companies do slip into financial difficulties. Keeping ahead of the game can help steer you away from struggling customers and for you to know that with reliable credit insurance your business will not be out of pocket.