Within a week of Multiyork’s collapse another furniture retailer, Feather & Black, are facing closure, with 123 jobs at stake. Feather & Black have the same owners as Multiyork. Even though the administrators, Duff & Phelps, say they are confident a buyer will be found, they can give no guarantee. Once again the suppliers will be uncertain as to whether they will be paid.
Duff & Phelps
Mr Graham, one of the administrators for Duff & Phelps reported many retailers had been hit by the slowdown in consumer spending. The main rate of inflation is currently 3%, which is the highest level for five-and-a-half years.
"With inflation rising faster than wages, consumers are beginning to feel the pinch and have cut back on their household budgets," Mr Graham added.
He said the tough trading conditions meant that Feather and Black "could no longer meet its ongoing liabilities".
The liabilities are made up of:
- Trade creditors (Suppliers)
- Bank loans
How vital is credit insurance?
No one likes uncertainty, especially business owners. When you run your business you control all aspects of the company. So why should your trade debtor be any different? Credit insurance is primarily a protection against the risk of non-payment from your customers. A non-payment or bad debt can be caused by insolvency, administration or cash flow problems. As you know, business won is only good when the cash is actually received!
Another benefit is the ability to access up-to-date credit information on your customers as the credit insurers often know something is amiss before the press, public and companies house. The knowledge gained then points you in the direction of secure companies to trade with and therefore supports actual growth.