Amid all the headlines about worrying economic news, there has been a story which has shown how swift, correct decision-making can help firms which are suffering in current economic conditions. Alexon, a fashion group which employs around 2700 staff, has been taken over by a private equity firm.
At Cooper Matthews we know that many companies on the brink of collapse have the capacity to be efficient concerns if the right measures are adopted. Struggling businesses can have happier futures if they get the chance they deserve.
Alexon had been struggling for over sixth months. It had issued three warnings with regard to profit levels in the period before the takeover. Its business financial difficulty was such that it would have been unable to afford the rent due for its shops. As the end of September neared, its shares were finally suspended. The severity of its problems was underlined by the fact that it had debts which were almost 9 million pounds higher than its market worth of around 4 million pounds.
The company was saved using pre-pack administration. This method will not be appropriate for every struggling organisation – when trying to deal with debts accumulated through business activity, ‘one size does not fit all.’ Experienced practitioners must look at each company on a case-by-case basis.
Nobody can predict what the future holds for Alexon. This is true for every enterprise which receives a second chance. Nonetheless, the example of Alexon does indicate how foolish giving up actually is.