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Retailers in distress

With some high-profile businesses hitting the rocks in recent months, it’s time to take a fresh look at how to head off crisis. David Parsley investigates.

It seems rarely a week goes by before we hear of the next struggling company. While the sectors and reasons may differ, there appears to be a familiar story of management not reacting fast enough.

That has certainly been the talk around Carillion, the outsourcing giant that collapsed earlier this year leading to the UK’s largest corporate failure since the global economic crisis a decade ago. The group, which had been in business for 200 years, went into liquidation after contract delays hit revenue, and a fall in new business left it wallowing in debt and with a pension liability of more than £2bn.

Since it collapsed, the inevitable inquiries have already pointed to management’s failures – that the board knew the problems existed, but attempted to paper over the cracks, and even deny its existence to the outside world.

Failure to adapt

As for the likes of Maplin and Toys R Us, a failure to prove added value from higher prices than the likes of online retailers, such as Amazon, and supermarkets that are constantly expanding their range to overlap high street stores in toys and electricals, appears to be the underlying reason for their failures. 

This is an extract from the Business & Management Magazine, Issue 263, April 2018, p.26-29. 

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