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Happy Sunday: 2 May

Posted on May 02, 2021. by NTI

There is a top shop for sale on London’s Oxford Street. It’s fair to say that it was valued, on paper, at £500 million a couple of years ago, but there has been a torrent of water under the bridge since then and someone might regard such a prominent location as going for a song at the current price tag of £420 million.

The property used to house Topshop (remember? On the intersection with Regent Street?), an erstwhile part of Philip Green’s fallen retail empire, and the NTI newsroom feel our readers need a little perspective, it being offered in the guise of the value of Green’s super-yacht ‘Lionheart’, at an estimate of £100 million. The clothing formerly shown at these premises no longer need such a prominent home, as it is being sold on virtual hangers at Boohoo these days. 

Green has ample space to relax and lick his wounds aboard his steel-hulled yacht, as he can choose from six lavishly appointed state rooms, but Administrators from Interpath Advisory can enjoy no such luxury as they have appointed real estate advisers from Eastdil Secured to market the properly. Eastdil (which transforms to ‘wasteful’ on predictive text) reckon the ‘landmark building’ offers the multifaceted possibilities of a “new age retail concept”, and it is rumoured that Boohoo might look at it as a place to store some of their outdated hardware as their business grows. 

Boohoo themselves are enjoying a boom, as they have seen their own new age retail concept (selling cheap, disposable fashion online) grow exponentially during the time of pandemic and their latest report to market comes on Wednesday (5 May). Market analysts, such as Sussanah Streeter at Hargreaves Lansdowne have predicted that the company will deliver an adjusted pre-tax profit of £147.3 million for the year, but the more interesting numbers may be future ones, as we have now returned to the high street, shading our eyes from the sun, with the opportunity to actually see and feel the fashion we clothe ourselves in. 

The Sunday Times have put together something interesting this weekend, analysing 79 high street restructurings and insolvencies over the past three years. The results reveal that those in our glorious profession lucky enough to be in that mix are set to share £130.4 million in fees. Deloitte leads the way with a nice but unfounded number of £53.4 million, around half of which will come from handling the insolvency of the fallen Arcadia Group, and hard on their heels come the now formally re-named Interpath Advisory with £30.5 million of fees. Had Del Boy worked for either of these businesses, both now freed from connection with their parents, he might have termed these numbers: “A nice little earner.”

The Times report that 462,715 retail jobs have been lost over the same period, but fails to grasp the fact that millions will have been saved by restructuring interventions. Are surgeons ever so misunderstood? Do journalists publish photos of amputated limbs, when describing humans who have been saved from death by surgery?

The paper actually writes: “The desperation of companies teetering on the edge and the limited number of firms equipped to handle complex insolvencies have combined to empower the ‘big four’ to a potentially unhealthy extent. There is, in effect, a regulated monopoly granting them the right to do this work - and a convention between the firms that they maintain super-normal profit,” said Richard Murphy, visiting professor of accounting at Sheffield University.

”Er, Richard (can we call you Dick?), where are you actually visiting from? Is the atmosphere on your planet so rarified that you fail to understand how a sophisticated modern regime of company restructuring is the only way to save businesses, jobs and supply chains, as well as encourage investment in future enterprises?” (He did, at least, describe our joint expertise as ‘regulated’. Gee, thanks.)

You know what? We are going to call you Dick.”

As a matter of interest, the Times reports that third in the ranking for fees from this type of business is FRP, with £10 million worth of invoices, with PwC hard on their shoulders, with £9.7 million. (The NTI newsroom suspect that Grant Thornton may be secretly sniggering into beer chilled by evening outside drinking, when they compare the above with the fees they will undoubtedly earn from Greensil. And, by the way Times journalists, they will earn this.)

In the Times report a former director at Debenhams said the store chain became a “carcass to be gorged on” in its last years, with accountants, lawyers and bankers extracting tens of millions of pounds in fees.

We should bear in mind that this former director may be the person who now packs boxes of knickers for Boohoo, ready to post to someone in Northampton, so if you could just pass me the pinch of salt I can enjoy my lunch a little more on this ...

... Happy Sunday.

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