COVID-19 Lockdown Is A Disaster In Making For Thousands Of High-End Businesses

Posted by Sama in Business On 1st April 2020
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The worst fears have started to turn true. With the whole world under lockdown and current situation likely to follow in the coming up months, it is believed if the government extends the self-isolation conditions beyond the initial three-week period then many high-end businesses such as that of restaurants and shopping centers may collapse.

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#1

With the situation of lockdown that is likely to follow for the next few months, it is believed that high-end businesses are going to suffer a blow that they may not be able to recover from. Restaurants, pubs, shopping centers can face closures in the coming uptime. Even though the government is providing unprecedented financial support and changing insolvency rules to give companies more time to pay debts but given the situation it is not really helpful.

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#2

The nationwide lockdown has already led to the permanent closure of almost all of the restaurant chains Carluccio’s and Chiquito. It is reported that if the government extends the self-isolation period beyond three weeks, many more famous business chains can collapse under the pressure.

The fashion chain Monsoon Accessorize said on Sunday it had been badly affected by the outbreak and was looking at a range of options. One is a sale of the business, which is being explored by restructuring experts at FRP Advisory, raising fears for the future of the chain’s 3,500 employees.

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#3

Ever since the government announced non-key workers to venture out of their homes only to buy food, for other essential services, or for daily exercise, the number of people visiting the famous street has reduced to three quarters only.

The retail intelligence firm Springboard said footfall last Tuesday – the first day of the lockdown – was down 75.4% compared with the same day in 2019. “The annual decline in UK footfall on Tuesday 24 March was the most severe on any day since the start of the coronavirus outbreak, but it was still less than in both Italy and the US,” said Diane Wehrle, marketing and insights director of Springboard.

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#4

More than 1,400 restaurant businesses and at least 500 pub businesses collapsed into insolvency last year, according to the accountancy group UHY Hacker Young. The number of collapses in 2019 was 10% higher than in 2018, and included high-profile names such as Jamie Oliver’s UK restaurant empire.

Peter Kubik, a partner at UHY Hacker Young, said restaurant chains were likely to be the hardest hit from the coronavirus crisis. “Most other businesses can shift their staff to home working or sell through the internet. Clearly that is not possible for pubs,” he said.

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#5

The Restaurant Group has said the majority of its Chiquito restaurants will not reopen when movement restrictions are lifted, and nor will its 11 London-based Food & Fuel pubs, leading to the loss of 1,500 jobs.

The Italian restaurant chain Carluccio’s is understood to be preparing to file for administration. The restructuring specialist FRP Advisory confirmed it was working with the chain, which has 73 sites and about 2,000 employees.

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