Firms in Nottinghamshire which have supplied ailing retailers should act quickly to recoup stock, says a leading lawyer from the local office of Eversheds LLP.
Mark Wood, specialist restructuring lawyer, has issued advice following news of a string of retail insolvencies including womenswear retailer Jane Norman, Habitat, Moben Kitchens and Dolphin Bathrooms.
Mark said: “The news of the demise of these bastions of the high street is troubling in itself, however the ramifications for small businesses and their suppliers is equally as worrying.
“The effects upon supply chain businesses that stand behind such large retailers will no doubt have wider effects in the sector itself and will hit their own revenues extremely hard.
“In some circumstances – and without the right protection – such high end insolvencies can often cause further terminal positions further down the supply chain. Such suppliers need to act quickly and do what they can to identify and recover any items supplied pursuant to their own retention of title clauses within those terms and conditions agreed with their buyers and if possible to seek to recover those items, together with any all important tooling to utilise and support their other revenue streams in their business.”
A number of high profile retail insolvencies have occurred this last month after being unable to pay their quarterly rent charges plunging them into administration and having significant knock-on effect to small firms throughout the sector.
Mark, who is head of restructuring for Eversheds LLP in the East Midlands, said the key was for suppliers to act quickly and use their professional advisors to assist them recover what value they do hold in the supply chain.
“Many small suppliers that haven’t protected themselves with robust terms and conditions with their end customers are at risk, especially if their revenue streams are not diversified enough to cope with any one major customer insolvency,” he added.