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sancho panza

Bricks n Mortar retail apocalypse.

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https://www.retailgazette.co.uk/blog/2019/03/1200-jobs-at-risk-as-office-outlet-falls-into-administration/

The future of 1200 jobs at Office Outlet has been plunged into uncertainty as the retailer fell into administration.

Partners at Deloitte were appointed joint administrators yesterday.

All 90 of Office Outlet’s stores will continue trading while the business is marketed to potential new owners.

“In addition to a general downturn in trading as a result of the ongoing decline in the stationery market and UK retail in general, the company has recently experienced a reduction in credit from key suppliers, given the economic outlook which has severely impacted the financial position of the company,” joint administrator Richard Haws said.

“We are hopeful a buyer can still be found for the business in the coming weeks and we will continue to trade the business with that aim in mind.”

The news comes after Office Outlet launched a CVA last August, which saw a handful of store shut down as well as three years of free rent on 20 others.

However, the CVA failed to save the retailer, which has reportedly had trouble scraping together rent for its estate of more than 90 stores ahead of the due date on Friday.

US-based stationery giant Staples agreed to sell its UK shops to Hilco Capital, the former owner of HMV, in late 2016.

The stores were then renamed Office Outlet, while a separate online business continues to operate separately and independently in the UK under the name Staples.

Office Outlet chief executive Chris Yates said: “Over the last two years the business has been transformed from the heavily loss-making old Staples business to a near break-even modern multichannel retailer.

“However, additional growth capital was required to continue delivery of the next stage of the management buyout business plan.

“Despite being highly impressed by the Office Outlet story potential investors have held back due to retail sector sentiment and the general level of uncertainty.”

Office Outlet’s collapse is another disappointment for Hilco, after the investment firm was forced to place HMV into administration late last year.

The music retailer was eventually sold to Canadian music business Sunrise Records, resulting in the closure of 27 locations including the original Oxford Street branch.

 

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Bonmarche issues 3rd profit warning as shares dip 14%

https://www.retailgazette.co.uk/blog/2019/03/bonmarche-issues-3rd-profit-warning-shares-dip-14/

Bonmarche has issued its third profit warning in just six months, saying it would suffer a bigger loss than anticipated this year following tough trading in March.

The British fashion retailer said it previously expected an underlying loss of up to £4 million, but is now expecting up to £5 million and £6 million.

 

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There's two article Ive read today:

Job losses feared in sweeping away low pay

https://www.ft.com/content/df1ab92a-4998-11e9-8b7f-d49067e0f50d

About Hammond rising the NHMW . He best advised to stop low skilled immigiation (housing) and tax IO BTL t oblvioin.

From the comments:

Tyranus 46 minutes ago Also this will decimate service jobs in poor parts of the country, which we say we want to help the most. Small businesses with thin margins in retail up in the North will shut down as they can't take on staff. Meanwhile down in London, where no one earns the NMW anyway, liberal economists will be happy.

And this:

https://www.economist.com/business/2019/03/16/how-the-internet-led-to-greater-wage-inequality

The pay gap may be related to education and training. A survey of oecd countries in 2016 found that, on average, more than half of adults could, at best, carry out no more than the simplest digital tasks, such as writing an email. Only a third had the kind of “advanced cognitive skills” that would allow them to flourish.

My empircal feedbck is ~10% of UK adults cannot read, fullstop.

30% cannot follow writing instructions.

50% cnnot perform simple maths - think faactons/percentages.

Just because people are stuck on phones, whatsapping and facebooking that does not translet being able to operate software at outside of application that has literally billions poured in UI research and simplification.

Using software based process is hard.

Writing large scale, distributed software is probably the most difficult complex tasks humanity have ever engaged with. 

 

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1 hour ago, sancho panza said:

https://www.retailgazette.co.uk/blog/2019/03/1200-jobs-at-risk-as-office-outlet-falls-into-administration/

The future of 1200 jobs at Office Outlet has been plunged into uncertainty as the retailer fell into administration.

Partners at Deloitte were appointed joint administrators yesterday.

All 90 of Office Outlet’s stores will continue trading while the business is marketed to potential new owners.

“In addition to a general downturn in trading as a result of the ongoing decline in the stationery market and UK retail in general, the company has recently experienced a reduction in credit from key suppliers, given the economic outlook which has severely impacted the financial position of the company,” joint administrator Richard Haws said.

...

That's nonsense.  There is almost certainly exactly the same amount of stationary being bought as 12 months ago (and 24, 36).  The issue here is that businesses (and people) have realised that OD aren't as competitive as other sources.  This is IMO the same effect that killed Maplin (and others) -- it isn't that the trading environment has changed, more that a significant %age of their customers have worked out that they're being ripped off -- and the thing about realising this is that you'll never go back (no matter how hard the retailer tries).

Another thing -- They say additional growth capital was required to continue delivery of the next stage of the management buyout business plan -- so why not just stop here?  It is nonsense to say (effectively) 'we can't grow any more, so we're going to have to close everything'.

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11 minutes ago, dgul said:

That's nonsense.  There is almost certainly exactly the same amount of stationary being bought as 12 months ago (and 24, 36).  The issue here is that businesses (and people) have realised that OD aren't as competitive as other sources.  This is IMO the same effect that killed Maplin (and others) -- it isn't that the trading environment has changed, more that a significant %age of their customers have worked out that they're being ripped off -- and the thing about realising this is that you'll never go back (no matter how hard the retailer tries).

Another thing -- They say additional growth capital was required to continue delivery of the next stage of the management buyout business plan -- so why not just stop here?  It is nonsense to say (effectively) 'we can't grow any more, so we're going to have to close everything'.

Re: Life Insurnace companies offering With Profit investments.

As soon as that was sussed - poof! 99% if LI companies disappear.

 

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3 hours ago, dgul said:

The issue here is that businesses (and people) have realised that OD aren't as competitive as other sources.  This is IMO the same effect that killed Maplin (and others) -- it isn't that the trading environment has changed, more that a significant %age of their customers have worked out that they're being ripped off -- and the thing about realising this is that you'll never go back (no matter how hard the retailer tries).

It isn't even so much that shops are (were) ripping people off.

Websites used to advertise in newspapers 'Save 30% compared to the High Street'.

That 30% margin allowed the shops and sheds to pay staff, rents, rates, and electricity bills for displays and lighting.

By driving down prices in store to compete with online the money isn't sufficient to cover overheads. 

Without that 30% they can't pay staff bonuses, can't pay business rates, and can't carry on, investing in stock, or anything else.

They can't increase prices because customers will shop online, they can only cut costs, eventually they close.

A situation not helped by online traders selling below cost, relying on turnover bonuses from suppliers, and not fully paying taxes. Even they are exposed to withdrawn lending by their banks.

Another problem for online, and some department stores, is that for decades they have relied on specialist retailers advising punters what to buy, letting them touch and feel the product, then undercutting them on price. These specialist stores are mostly gone now, so punters don't know what to buy, so they buy the cheapest on offer.

This is now affecting the brands themselves, nobody is selling up to their product.

Retail is dead already. Only two retail scenarios remain, ones that will shut soon, and others that will shut real soon.

Where did that 30% go anyway ?

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50 minutes ago, Bedrag Justesen said:

.......

Without that 30% they can't pay staff bonuses, can't pay business rates, and can't carry on, investing in stock, or anything else.

.......

Indeed.

I've looked at business opportunities but can't get over the drag of bricks and mortar - rates and the like.  You have to run so far just to cover these significant and fixed costs before you'll see any profit.

Local authorities are just putting off the inevitable, when they've plucked this goose dead.

If I can't do it on-line and anyway, I'm not interested, however much I would like to have a physical presence and contribute to the community.

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True story incoming:

 

I needed to get some contact lenses. Buy a job lot of disposables, I know my eye strength (one eye only) 🧐 so I phoned up my local high street spec Savers to order ten years worth or whatever

I told them I can click on line the strength I need and they’ll deliver them to me within a few days or whatever, but I want to give my money to them to support my local “economy” high street jobs etc

 

they refused to sell me any contact lenses unless I also paid for an eye test. Simply refused. I explained that I was looking to hand over my money to them rather than handing my money over to eyez dot com or whoever but still they persisted.

 

so they didn’t get my money 

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22 minutes ago, Wig said:

True story incoming:

 

I needed to get some contact lenses. Buy a job lot of disposables, I know my eye strength (one eye only) 🧐 so I phoned up my local high street spec Savers to order ten years worth or whatever

I told them I can click on line the strength I need and they’ll deliver them to me within a few days or whatever, but I want to give my money to them to support my local “economy” high street jobs etc

 

they refused to sell me any contact lenses unless I also paid for an eye test. Simply refused. I explained that I was looking to hand over my money to them rather than handing my money over to eyez dot com or whoever but still they persisted.

 

so they didn’t get my money 

In fairness to them I believe its UK law that you have to have a prescription within the last 2 years. The online contact lense sellers that don't insist on up to date prescriptions are based abroad (Netherlands quite often) where its not law.

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1 hour ago, Wig said:

True story incoming:

 

I needed to get some contact lenses. Buy a job lot of disposables, I know my eye strength (one eye only) 🧐 so I phoned up my local high street spec Savers to order ten years worth or whatever

I told them I can click on line the strength I need and they’ll deliver them to me within a few days or whatever, but I want to give my money to them to support my local “economy” high street jobs etc

 

they refused to sell me any contact lenses unless I also paid for an eye test. Simply refused. I explained that I was looking to hand over my money to them rather than handing my money over to eyez dot com or whoever but still they persisted.

 

so they didn’t get my money 

They probably have a standard operating procedure - no one at shop level can make that call.

 

----------------------------------

 

 

https://www.birminghammail.co.uk/whats-on/shopping/bq-owner-kingfisher-set-axe-16000047

B&Q owner Kingfisher set to axe 15 stores - with Screwfix at risk too

Edited by 201p

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So property market was "saved" from crashing too bad in 2008.

Will they save the commercial property market this time around? We have seen it already, with many councils buying up shopping centres with a lot of borrowed money.

I guess they can be big enough to sustain the voids almost indefinitely.

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7 minutes ago, 201p said:

B&Q owner Kingfisher set to axe 15 stores - with Screwfix at risk too

Shame, especially about Screwfix but it was getting expensive.  Plus, all that discriminatory nonsense trying to court the trade.  Just alientated the trade.  And that bl**dy B&Q website!

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4 hours ago, Bedrag Justesen said:

 

Where did that 30% go anyway ?

 

Good question. I suspect it is spread out more thinly to more online sellers. Some of the big sellers pretend they have a UK business (by putting a Union Jack on the Ebay Thumbnail) but actually ship from Singapore.

That 30% covers for refunds, broken stock, returns etc. Now if the online retailer has not got that 30%, they basically ignore the buyer if they say they didn't get it or it was broken. They can afford the negative feedback - ebay sellers with like 10K feedback have high throughput, and typically may have 50 negative feedbacks in a month. Ideally they don't want this, but because the margins are thinner, they rely on the many good feedbacks to balance it out.

That 30% was used for the customer service experience. Without it, you just take a punt on the product turning up, not getting lost around the world, and hope it is what is described.

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1 hour ago, Wig said:

True story incoming:

 

I needed to get some contact lenses. Buy a job lot of disposables, I know my eye strength (one eye only) 🧐 so I phoned up my local high street spec Savers to order ten years worth or whatever

I told them I can click on line the strength I need and they’ll deliver them to me within a few days or whatever, but I want to give my money to them to support my local “economy” high street jobs etc

 

they refused to sell me any contact lenses unless I also paid for an eye test. Simply refused. I explained that I was looking to hand over my money to them rather than handing my money over to eyez dot com or whoever but still they persisted.

 

so they didn’t get my money 

Just bang two bits of plastic in ... sorted.

Youve been a bit rash.

Go and check tge eye tester out. If they are hot romanian giroy dr tgen take tge test.

Otherwise ... online.

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11 hours ago, Harley said:

Shame, especially about Screwfix but it was getting expensive.  Plus, all that discriminatory nonsense trying to court the trade.  Just alientated the trade.  And that bl**dy B&Q website!

Yeah Screwfix prices seem to be rocketing. I assume the assumption is the trades pass on any costs to consumers? For me personally as a diy’er some items are available from UK trade suppliers through the dread eBay / Amazon marketplace. (If I am ok with the lead time the items will be cheaper than screwfix)

 

Edited by Ash4781b

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13 hours ago, 201p said:

They probably have a standard operating procedure - no one at shop level can make that call.

 

----------------------------------

 

 

https://www.birminghammail.co.uk/whats-on/shopping/bq-owner-kingfisher-set-axe-16000047

B&Q owner Kingfisher set to axe 15 stores - with Screwfix at risk too

That's a very misleading headline -- Screwfix is giving up on a few countries, but in the UK it is a star performer that'll they'll probably expand more.

Re Screwfix being expensive -- Toolstation is the new Screwfix.

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12 minutes ago, dgul said:

Re Screwfix being expensive -- Toolstation is the new Screwfix.

Definitely.  Toolstation first, then Screwfix.  Glad to hear it's just more rubbish journalism.

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3 hours ago, Ash4781b said:

Yeah Screwfix prices seem to be rocketing. I assume the assumption is the trades pass on any costs to consumers? For me personally as a diy’er some items are available from UK trade suppliers through the dread eBay / Amazon marketplace. (If I am ok with the lead time the items will be cheaper than screwfix)

 

IKEA are also rocketing. I couldn't believe some of their prices online - £400 for a bookcase made of cheap pine in Bosnia (?).

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17 hours ago, 201p said:

They probably have a standard operating procedure - no one at shop level can make that call.

 

----------------------------------

 

 

https://www.birminghammail.co.uk/whats-on/shopping/bq-owner-kingfisher-set-axe-16000047

B&Q owner Kingfisher set to axe 15 stores - with Screwfix at risk too

If the axing (axeing) is being done with a b&q axe those fifteen stores are staying open 👀

2 hours ago, spunko said:

IKEA are also rocketing. I couldn't believe some of their prices online - £400 for a bookcase made of cheap pine in Bosnia (?).

The wife somehow got me into an ikea once.

 

 

Once.

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On 20/03/2019 at 15:59, Harley said:

Indeed.

I've looked at business opportunities but can't get over the drag of bricks and mortar - rates and the like.  You have to run so far just to cover these significant and fixed costs before you'll see any profit.

Local authorities are just putting off the inevitable, when they've plucked this goose dead.

If I can't do it on-line and anyway, I'm not interested, however much I would like to have a physical presence and contribute to the community.

Yeah I've often seen what I thought were good bricks and mortar opportunities, then when you mull it over realise you'll get murdered on the fixed costs + staff. Upward only rent reviews meaning even if you beat the odds your Landlord will be wanting a big slice of that pie.

Only bricks and mortar which looks good to me is running a 24/7 automated gym (lovely monthly fees) or some hipster fast food shit hole banging out "gourmet" "dirty" gluten free hot dogs at £8 a pop to gullible dickheads.

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I thought after the comments about B&Q I’d venture into a store. Agreed the quality of a lot of the products left a lot to be desired (most of the stock I saw looked like overpriced junk). Prices were pretty high, store stuffed full of tat and brands ‘available’ on the website nowhere to be found. Their website is a problem and I find it pretty dreadful to use but it’s been like that for years . Lots of announcements over the tannoy about 50years of b&q. If I was a shareholder in Kingfisher i’d Be worried they wreck the Screwfix operation- probably will spin it off eventually.

I also went into Homebase which was much the same as usual each new owner trying a new trick to turn it around. 

 

 

Edited by Ash4781b

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Its not just the bricks- look at AO world plc. Also reading about ASOS tweaking return policies- youngsters playing the system almost ‘renting / trialing clothes lol 😂 

Back to the bricks and mortar Sainsbury’s Plc will need turning around. Really do not know what the management were thinking there buying Argos then going after Asda. I expect non food margins are collapsing and in the food side haemorrhaging customers to rivals. It appears they cannot abandon the Asda merger.

Dixons Carphone looks sick to - on mobiles side Sim only phone deals getting really cheap but handset prices sky high. Seem to be pushing insurance policies hard lol

Superdry Plc has had quite a public boardroom battle. It’ll make a good book / article.

There’s definitely a sense of a retail shakeout - the likes of Mike Ashley etc and old retailers returning after seeing their companies wrecked.

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