Are companies going bust a sign of things to come?

While the government are trying to protect the economy and its citizens from the impact of covid-19 and people not being allowed to work there is an increasing body of evidence that there are potentially unintended consequences. It is always easy to give away and spend other people money which is what governments are doing globally with TAX PAYERS money.

Surely a company like Primark which in 2019 made £900 million. could afford to look after its own staff? It has just announced that it has furloughed 68,000 staff as sales went from £650 million a month to ZERO. Primark claim to have £1.5 billion of stock in warehouses and are going to write off £284 million from stock not sold. If we assume that the average salary of £18,000 p.a. the cost to furlough which the taxpayer (i.e. you and me) picks £81,600 a MONTH. Why has Primark not got an on-line operation? If it did how much stock could it sell

How culpable are the management of Primark as it has seen retail sales move on-line?.

Why is it the taxpayer that has to bail out Primark’s  business that has been around since 1963 and made billions for its shareholders?

Then we have Victoria Beckham  who is claimed to be  worth $450 million yet she is  getting up to £60,000 p.m. for furloughing 30 of her staff, possible the cost of a fancy outfit for her

Is this a sign of what is to come as Cath Kidston carries out a ‘prepack’ sacking 900 staff but the previous owners Baring Private Equity Asia are buying the brand and the online business which was 20% of the turnover

How much debt will Cath Kidston now not be paying off – VAT, NI, suppliers?

Expect to see huge increase in prepacks and companies going in to administration as why take on more debt when you can liquidated your business and buy it back the next day debt free? This type of activity potentially will have a huge impact on the economy

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