Review of the year
IT has been a crunch year for the North West business community with thousands of job losses as many companies batten down the hatches in order to survive the recession.
There were very few big deals – the Co-op’s £1.5bn Somerfield swoop being the exception – and many in the corporate finance community were left twiddling their thumbs, while the insolvency experts could hardly keep up with the number of struggling companies knocking on their doors.
However, two of the most eye-catching deals were a result of Middle Eastern investment, and experts predict there will be more to come from wealthy Arab investors during 2009.
Manchester City was heading for crisis as its owner, former Thai Prime Minister Thaksin Shinawatra fled justice in his homeland.
With his assets frozen Shinawatra clinched a deal in late August to sell the club to a member of the Abu Dhabi royal family, Sheikh Mansour bin Zayed for around £200m.
At the stroke of a pen City were catapulted up the soccer rich list. To emphasise the new era, Brazilian star Robinho was signed for £34m.
Elsewhere, Stretford-based BWA Water Additives was taken over by the Bahrain based bank, United International Bank BSC in a £100m-plus deal.
UIB acquired BWA, which develops and produces chemicals for water treatment, from Close Brothers Private Equity.
Despite foreign money arriving in the region from the Middle East, the North West has not been immune from the global downturn and thousands of workers are facing the New Year unemployed.
The demise of the once mighty Woolworths will see more than 3,000 people lose their jobs, with around 700 going in Lancashire, 560 Merseyside and almost 900 in Manchester.
The region’s finance and lending industries were also hammered. Bolton-based Loanmakers axed half of its 70-strong workforce, while at least 40 jobs have been lost at Manchester asset-based lender Davenham.
Administrators at London Scottish Bank started the first wave of redundancies after the Manchester-based group collapsed at the end of November. Redundancy notices were given to 46 out of the 700-strong workforce who are facing an uncertain future.
The region’s construction industry has also had a torrid year. In Flintshire Redrow Homes has lost more than 500 staff amid the gloom in the housing market, while almost the same number were made redundant at Chorley based timber firm, Palgrave Brown, after it went into administration.
Around 130 jobs were lost at David McLean in its construction and property division after the Deeside group fell into administration, however 90 posts were saved after the house building business was bought by its management team.
More than 100 jobs have gone so far at developer Urban Splash which is conducting a further review, while Lancashire paint maker, Crown Paints has announced plans to cut 140 jobs from its UK and Irish workforce of around 1,500.
The move by the private-equity owned company follows a review of the business by new owners Endless and in light of a slump in trade caused by the slowdown in consumer spending.
Other notable events in the business community was after months of speculation NWDA chairman Bryan Gray decided to stay on at the helm to help the region cope with the recession.
MediaCity, Peel Holding’s landmark development at Salford Quays, which will be the BBC’s new northern base from 2011, continued apace, but is currently leader-less aftter the sudden departure of chief executive Brian Greasley in November after just one year.
The region’s listed companies had mixed fortunes, with home shopping firm N Brown, soap maker PZ Cussons and JD Sport Fashion continuing to shine despite the economic gloom, while others, such as JJB Sports lumbered from one crisis to the next.
The spirit of enterprise continued to shine in the North West as for a second year a young businessman from this region won the Bank of Scotland Entrepreneur Challenge, and with it a free £5m overdraft.
Matthew Moulding, founder of Cheshire-based online retailer The Hut triumphed in the nationwide contest – a year after a former classmate, Daisy Communication’s Matthew Riley won the same award.
