The twin announcements of the demise of MFI and Woolworths set me thinking about the knock-on effects of these failed businesses.
Even Ma-in-law was concerned at the news of Woolworths disappearing. With the impact of the news she retained the information in her memory store, which is usually very short-term these days. When she was young the Saturday treat was to take the train, twenty miles East to shop in Woolworths. In those days, the shop was a veritable storehouse with all types of merchandise including, ladies wear,menswear, children’s clothes, spectacles,groceries sweets and so on. There was no need to travel when another Woolworths opened on the West side of the county. In their respective places, the stores still operate.
One of the local painting firms started tidying and painting the interior of the store in the East side of the county; it was a terrible mess for years with curtains of paint hanging down the walls. The refurbishing has come to a juddering halt with the news of receivership. The painter is likely to be an unsecured creditor,like many other suppliers, businesses and individuals are likely to be.
Employees are in a parlous state. They know their salaries are secure till the end of November. Who will now be retained by the receivers to keep the business selling whatever goods it has in the stores? Inevitably, there will be employment casualties in a few days. This will be repeated when the seasonal selling is done. There are pensions at stake as well. In the more remote places, at any rate, employees tend to be long term.
Much of the same will apply to MFI, a company that rose like a phoenix from the ashes with a management buy-out. It has now collapsed. It is doubtful that there could be a reprise.
It was clear from discussions today that where major purchases are concerned, that is anything £100 and above, paying up front or by cheque is not a safe option, especially when you are left with part deliveries, awaiting deliveries, or you are in the throes of installing a kitchen. The buyer has much financial protection when using a credit card or a visa debit card, though, I am not clear if the protection is overarching with a debit card.
There will be many casualties of businesses that fail; as customers it is imperative people try, where they can, not to become one of the growing band of unsecured creditors.