Why are British big and medium size businesses taking the nosedive and what are emerging ones doing to stay afloat?
Entrepreneurs share their strategies for surviving the most critical time in British Business.
The wind of bust has been blowing through the high street in the last 5 years and has not only affected the fashion sector alone but has blown across sectors. 2018 saw some big victims such as; House of Fraser, Arch Angelz Ltd, American Golf, HMV among others.
Jamie Oliver’s Italian restuarant chain has just become the latest victim, another British high end business draws its curtain to customers after 12 years of trying to “disrupt mid-market dining in the UK high street, with great value and much higher quality ingredients.”
This year alone, over 21 medium to big sized retailers have taken the nose dive, affecting over 31,141, according to Centre for Retail Research.
Others that have been blown out by the liquidation wind are;
Select, Better Bathrooms, Office Outlet, Wine Direct, News from Germany: Kaufhof, Monsoon Accessorize, OddBins, and Wine Cellars.
The major retailers affected include:
Debenhams, one of the largest and best-known brands on the high street, went into pre-pack administration on 9 April 2019. This affected its 165 department stores, more than 25,000 employees and thousands of concession staff.
Patisserie Valerie,, the well-known chain of French-themed cafes, went into administration in January. 71 loss-making stores and all concessions were closed immediately (900 staff losses) by administrators: the remaining 122 stores continue to trade whilst a buyer is found. There are 3,000 employees. This apparently-successful group was worth £450mn, before evidence of a £20mn (later £40mn) hole in the accounts and unauthorised loans of £9.1mn were discovered. Chairman Luke Johnson advanced £20mn of his own money (later reduced to £10mn) to keep the business afloat and a subsequent share issue raised £15mn from investors. But the company was unable to repay the unauthorised loans when they fell due and the company went into administration.
As these businesses scratch their heads struggling to find their feet, the question remains, why are big Brit businesses taking the nosedive?
Jen from Just Because Treats says,
“I believe, there are two reason the businesses are taking the nose dive: They’re very price driven and focused on matching competition rather than understanding their customers and adjusting to their needs/wants and providing value for money rather than value products.”
“They’re not embracing digital channels and delivering a consistent experience across all the channels. In their mind, there is still the offline and online world, when in reality consumers don’t notice that divide, they expect to see and experience the same message, offer or promotion at any touch point, seamlessly,” she says.
As the known brands continue to struggle, other emerging and small brand owners tell how they stay afloat this critical time for British Businesses.
Jen owner of ‘Just Because Treats’,
Who started just 7 months ago, says, she is attentively and openly listening to her customers to understand why they buy and how they use the products. Jen also uses personalisation and not automated, a real 1-to-1 conversation and customised offers. So far it has been successful but I guess as I scale up the business it may not be as easy, she noted.
Deborah Millington, founder of Right to Bare says, “If you are a start up, keep as lean as possible. If you are an established business, stay calm and focus on good customer service. Focus on premium products. Middle of the range products are not cost effective, and the low end market is crowded.”
This interactive Brexit tracker by finder.com may be helpful also for you to see as it shows the correlation between key Brexit events and their impact on the pound.
Tecsew is another emerging brand that has managed to keep their head above the water during these turbulent times, by adopting a number of different practices such as; diversification, investment into the brand and its’ importance, and endeavouring to give a better product with great customer service.
John & Ally Bland, Tecsew Directors said, “We carry out a bespoke recruitment process, with a strong emphasis on the importance of team work. Innovative Items and ideas from staff are encouraged and produced, along with consistent feedback. We have been focusing on developing their current website with an external company, with heavy focus on SEO. Marketing and social media presence to help promote the brand has also been strengthened by creating a new role within the company.”
What are you doing to stay afloat in your business, what do you think is crashing long established businesses?