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High street brands in fight for survival amid coronavirus fallout | Business


Laura Ashley has collapsed into administration as other well-known high street brands warn of looming jobs cuts and closures due to the coronavirus outbreak.

The warnings came as the UK chancellor, Rishi Sunak, unveiled a fresh package of economic measures to support businesses and individuals under financial pressure because of the crisis, while the Trump administration said it wanted to send cheques to US citizens as part of a new stimulus package to limit the economic fallout from Covid-19.

Laura Ashley said it would file for administration as the embattled fashion and furnishings firm, which operates more than 150 British stores and has 2,700 employees, said rescue talks had been thwarted by the pandemic.

Elsewhere, the outdoor clothing chain Mountain Warehouse, which has almost 400 branches in nine countries, said it was considering cutting 2,000 jobs after the coronavirus crisis triggered a “catastrophic” drop in sales.

Meanwhile, the Italian food chain Carluccio’s, which has 73 restaurants, warned it was only days away from widespread closures, and the catering group Compass issued a profit warning after the outbreak forced it to close almost half its business.

On Tuesday evening Selfridges tweeted that it was temporarily closing its four department stores in London, Manchester and Birmingham from 7pm on Wednesday. It said it would continue to serve customers online and through social media.


Selfridges
(@Selfridges)

To our friends and family,
An important announcement, made with love from Selfridges 💛 pic.twitter.com/OJJeUjRLX4


March 17, 2020

Boris Johnson, the UK prime minister, has urged the public to stay away from pubs, clubs and restaurants in an attempt to stop the spread of the virus. An outcry from operators was followed by the chancellor announcing a package of business rates holidays and government-backed loans to support the sector. The government added that it would relax planning regulations to allow pubs and restaurants to start providing takeaways without a planning application.

The high street announcements illustrate how suddenly confidence can slump in the sector, with Laura Ashley’s administration coming just days after the company had said it had seen no effect on its trading from coronavirus –even as it was actively seeking a £15m emergency loan to keep the business afloat.

In a statement on Tuesday, the retailer said: “The Covid-19 outbreak has had an immediate and significant impact on trading, and ongoing developments indicate that this will be a sustained national situation.”

Nervousness about the economic hit of coronavirus was also exacerbated as it emerged that most British companies suffering a loss of sales or shut down are unlikely to be protected by an insurance.

The Association of British Insurers said in a letter to parliament’s business, energy and industrial strategy select (BEIS) committee that insurance policies that protect companies from closure following a pandemic are rare, with only a few businesses paying the extra to include them.

The committee also heard that the potential for a prolonged shutdown meant the chancellor will need to match the plans put forward in Scandinavian countries that subsidise 75% to 100% of workers’ incomes.

Alasdair Hutchison, a policy development manager at the Association of Independent Professionals and the Self-employed, said: “As time has gone on, we have realised this is going to be not only a health crisis but an income crisis.

“If you are facing no income for the next three to four months with projects cancelled and events not happening, with rent to pay and other costs, you need to move very quickly to something that is more of a temporary income protection fund.”

Norway has announced full pay for those laid off for 20 days and the self-employed to receive 80% of their average earnings over the last three years. Sweden said it would institute a plan for workers to receive 90% of their salary up to a cap, while Denmark said it would make sure workers received 75% of salary up to an earnings cap.

Other sectors are finding that their services are more in demand because of Covid-19, prompting them to make changes.

Online retail giant Amazon said it is stopping third-party sellers who trade via its website from sending non-essential items to its US and UK warehouses until 5 April, to make space for vital items needed by its customers during the coronavirus outbreak.


Reuters reported that the US company is prioritising five categories of goods which it calls essential products, and which shippers can continue to send to the warehouses: baby products, health and household; beauty and personal care; groceries; industrial and scientific; and pet supplies.

UK supermarket Morrisons has also announced it will recruit 3,500 new staff – and boost its home delivery service, to cope with the surge of demand due to the coronavirus.





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