There has been a recent increase in high-profile restructures, particularly within the retail and restaurant sectors. In the last few months restaurant chains including, Byron, Jamie’s Italian and Prezzo have all begun proceedings, with retail giants Toys “R” Us, Maplin and New Look following suit.
Some of these firms took too long to adapt, for example, Toys “R” Us failed to take note of the change in their customers’ tastes as well as their online competition such as Amazon. The rise of e-commerce has caused these firms to struggle as consumers look online for cheaper products. Within the retail and restaurant sectors, the key issues have been quick expansion with debt rather than with existing turnover, coupled with increased competition and rising costs by way of rent etc. This has caused quite the dilemma for a number of organisations as margins are continually reduced.
What skill sets will be required?
Restructuring focuses on providing turnaround advice and services to companies that are underperforming and financially distressed. This is not about closure, this is about reinvigorating firms by identifying opportunities for improvement financially, strategically and operationally. This would explain why firms like Toys “R” Us have gone into Administration, or why New Look are considering a Company Voluntary Arrangement.
With the increase in restructuring and turnaround cases, the demand for personnel with relevant advisory experience has also increased. Individuals involved in the
day-to-day work handle Independent Business Reviews, contingency planning, provision of restructuring options as well as financial and strategic analysis.
This may appeal to prospective employees’ who have experience working within insolvency; with exposure to larger cases or those which have a turnaround element e.g. Trading Administrations. You would ideally be part or fully qualified with an accounting qualification. This signifies to prospective employers handling the restructuring work, that you have the numerical skill to look into the specifics of these large, high profile cases.
With the current focus on turnaround rather than insolvent engagements, it is likely that there will be a further increase in this work being taken on and subsequently a calling for advisory/turnaround skillsets throughout 2018, as opposed to formal insolvency experience.
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