Crunch time for firms in struggling sectors
FEARS that the current economic slump will spark a raft of insolvencies have grown after a number of the region’s companies announced closures and job losses this week.
Transport, housebuilding and retail sectors are being hit hardest by rising fuel prices and the slowdown in the housing market caused by the credit crunch.
Yesterday Leeds-based haulage group Macfarlane Transport collapsed with administrators saying all 300 jobs are likely to be lost.
The rising cost of fuel was one of the key factors blamed for the company’s problems which has also seen luxury coach company Saltaire Travel – which was responsible for bussing Bradford City players and fans to matches across the country – go out of business.
The Baildon business announced to its customers that it ceased trading this week.
Meanwhile housebuilder Barratt Homes is set to make 1,000 staff redundant across the UK with 134 people affected at its operations in Leeds and Sheffield where it will close its office in the city.
The news came just 24 hours after housebuilder Taylor Wimpey announced 900 job losses across the country.
After several years of low numbers of insolvencies, specialists who have spent much of their time working behind the scenes with companies to reorganise their finances, are bracing themselves for a raft of high profile collapses.
Yesterday beleaguered furniture retailer SCS was sold to a US private equity company after it became the latest retailer to fall into administration.
Richard Fleming of KPMG Restructuring in Leeds was joint administrator for SCS and also had the same role for Macfarlane Transport.
Sales of furniture have been hard hit as consumers, squeezed by rising interest rates and inflation, have tightened their belts and cut spending on their homes.
Last week, Danish furniture retailer Ilva went into administration, while Land of Leather unveiled a £15m rescue package through a placing and open offer last month.
The deal for SCS means that the retailer’s 96 stores will stay open, saving 1,300 jobs, but shareholders are likely to be left with nothing.
Parlour Product Holding, an affiliate of the US-based buyout specialist Sun Capital Partners, bought SCS for an undisclosed fee, following a pre-pack administration.
SCS shares were suspended from trading at 6.5p on June 23, after the retailer said it was in exclusive talks to sell its sole trading subsidiary. The retailer’s share price, which hit a high of £5.70 in April 2006, has fallen by more than 90% in 2008.
