Companies Will Go Bust After Recession

Now that we're out of the recession more companies than before are expected to go bust. Insolvency experts have said around 28,000 will go bankrupt in 2010, 5,000 more than last year.

This is a common occurrence after a severe economic decline. In the recessions of the 80's and 90's unemployment peaked 2 years after recovery.

The reason for this happening is firstly because of an increased demand by customers from business owners for which they don't have the capital. The second reason is that loaners who may have lent to struggling owners during the crunch now expect payments quickly and the business owners are unable to pay this straight away.

There had been various help given by the government during this period including more loans and allowing taxes to be paid later. Some small to medium enterprises even had to take overdrafts which according to the British Bankers Association has amounted to £9B. Some want bankers and loaners to now be more flexible about receiving payments.

To prevent ones business becoming insolvent, Louise Brittain, the insolvency specialist at Deloitte, recommends seeking advice from professionals as soon as one feels they may be in difficulty. Speak to your bank and major creditors to make arrangements for cash flow issues and do this early.

Source: Working Lunch, BBC. (27-01-2010)

Companies Will Go Bust After Recession

Papa John's UK

Papa John's is an American pizza take-away with a market in Britain. They currently have 142 stores throughout the UK and have plans to open 40 more in 2010. They have seen a rise in sales for more than four years and saw a particular increase in the last winter.

The rise may owe partly to the recession as many preferred eating at home rather than going out to restaurants. Papa John's have also benefited from their new online order system where people may order even up to 14 days in advance. Thirty percent of their orders come online.

The company is one that looks for people franchising and in the last year has had around 1'200 applications. Their Managing Director Ian Saunders promises the franchisees great support before, during and after and recommends this course for those who would not want to risk running their own entrepreneurial venture in these economic times but would still like to run a business.

Source: Working Lunch, BBC. (27-01-2010)

Papa John's UK

New Balance Sports Shoes

New Balance is an American owned company with a factory in Fimbly in Cumbria. They are the last factory mass manufacturing trainers and other sports shoes in the UK and are well ahead of their competition in the Far East. Some of their items are even exported to those areas.

The factory was built just less than 30 years ago, and after other shoe making companies in the area closed down, New Balance had many skilled workers available. Up to now some of those who worked there from the start remain and work along side new younger recruits.

Surviving the Cumbrian floods as well the recession the company plans on following up its success by trebling productions from last year taking sales from £1M to £3M.

Source: Working Lunch, BBC. (27-01-2010)

New Balance Sports Shoes

UK Officially Out of Recession

Britain has officially just come out of its longest recession. After 6 consecutive quarters, or 18 months, of a shrinking economy the tables have finally turned.

The growth, however, is not as great as experts had predicted, having only risen by 0.1 percent. Some also fear a double dip claiming that people spent more only to avoid the rise in VAT that was to occur, and after the VAT has increased people may cut their spendings once again.

Still, many companies are feeling more confident because of this significant change. Managers at the Vauxhall plant in Luton for instance have already announced reversing their scheme of less work and lower pay which was put in place during the recession.

The founder of Jordans Cereals, Bill Jordan, is also feeling optimistic about these figures and says that over the last few months premium brands like his have already regained popularity.

Source: Working Lunch, BBC. (26-01-2010)

UK Officially Out of Recession

John Smedley Coping in the Recession

The family owned knitwear company, famed for its quality and price, are now celebrating their their 225th anniversary. The company makes around £15M a year on jumpers, cardigans and twinsets.

Andrew Caughey is John Smedley's Managing Director. He says that during the recession sales for the company have remained stable. The reason, according to him, is that in a downturn consumers are often willing to forego cheaper and lesser quality products for those which are more lasting.

Only a third of John Smedley's sales are in the UK, and it turns out that the Kingdom held strong for the business recently due to its weakening sterling which has attracted tourists to buy more.

Source: Working Lunch, BBC.

John Smedley Coping in the Recession