Recently, a government advisor, Professor Neil Ferguson, director of the modelling programme at Imperial College London's MRC centre for global infectious disease analysis, estimated that up to two thirds of people who die from coronavirus in the next nine months are likely to have died this year from other causes. He said that many of those deaths were likely to be old and seriously ill people who would have died from other conditions before the end of the year. What COVID-19 is doing, sadly, is speeding up the end of life and it’s the same for brands and retailers.
Some retailers have started to fall into administration, pointing the finger of blame at the COVID-19 coronavirus. The majority of these brands and retailers were sickly patients to start with. Brands like Beales, Laura Ashley, Carluccio's and BrightHouse were on wobbly ground way before this devastating virus was on the horizon. The coronavirus has just cut short the inevitable. Bournemouth based department store Beales closed earlier than scheduled and left unsecured creditors £17.6m out of pocket.
Left - The Beales flagship store in Bournemouth
Other patients at risk are brands like shopping centre group Intu, struggling under a £4.5bn debt mountain, and who failed to secure new funding before the crisis hit. They’ve also been hit by stores holding back their rent payments recently. Frasers, owner of Jack Wills, has been cutting off vast limbs of its retail network to save their critically ill patient, Cath Kidston is looking for a buyer to save the business and up to 800 jobs and New Look has requested a three-month rent holiday from landlords. H&M has threatened landlords with walking away from 300-plus store leases if sales fail to match pre-coronavirus levels once the pandemic passes. How others like Debenhams and the Arcadia come out of this pandemic is anybody’s guess.
Right - Laura Ashley has fallen into administration
The patient metaphor has one big and important point; the third of previously healthy people who could potentially die. This is where the government efforts to help businesses should be focussed. Those businesses who were previously healthy, but, due to unforeseen circumstances, have been thrown into jeopardy should be given the largest help. Whether it’s down to the sector they are in or the way they sell, these previously healthy retailers should be given the ventilator of loans and payment holidays to give them life.
The longer this crisis goes on the larger that third will become. It is survival of the ones who were the fittest going into all of this.
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