Top Finance News stories of 2019
2020 has arrived and it’s time to take a look back at the top financial stories of 2019. We’re pretty certain you will have heard of them!
Patisserie Valerie Scandal:
This year saw Patisserie Valerie collapse into administration putting more than 3,000 jobs at risk, after failing to secure a financial lifeline from its banks. The company announced that it had discovered accounting irregularities in October, much to its investors’ dismay. The company’s Finance Director; Chris Marsh was arrested by Hertfordshire police in October, he resigned that month. Patisserie Valerie said that the misstatement of its accounts involved ‘very significant manipulation of the balance sheet and profit-and-loss account’ and ‘thousands of false entries’ in its ledgers. The Serious Fraud Office opened a criminal investigation and the Financial Reporting Council investigated Marsh and accountancy firm Grant Thornton for its role as auditor to Patisserie Valerie. The company insist there is a future for the business but do not go into detail about the challenge ahead.
Retail empire Arcadia saved from closure:
Sir Philip Green’s retail company Arcadia Group announced they were closing 48 stores under their restructuring plans in June last year. Creditors and landlords struck a very last-minute deal with the Arcadia group to close stores and reduce rents at shops across the empire in a bid to prevent it from falling into administration. The proposals were part of a rescue plan known as CVA, which is a way for companies to avoid administration by persuading creditors and landlords to cut the bills. This will see at least 1,000 people lose their jobs but has saved the company for now.
Thomas Cook declared bankrupt:
In 2019, after 178 years of business, travel firm Thomas Cook announced its collapse as it was unable to secure a 200 million lifeline from its bankers. The overnight news left around 150,000 holiday-goers stranded abroad, many wedding packages cancelled and around 22,000 people without jobs. Tim Jeans; a former managing director at the firm, who left long before its collapse, described the company as ‘an analogue business model in a digital world’. The firm had very little tangible assets such as planes and hotels so when customers left for online competitors to book their own flights and hotels, the value of the firm plummeted. It was goodbye to Thomas Cook!
How can we write an article without mentioning Brexit, it’s been the most talked about headline of 2019! As we all know, we finally have a date to leave the EU but are still not certain what this really means for everyone involved. Grant Thornton claim that a Brexit could reduce overall banking stability as any crisis may be met with divergent responses from UK and EU regulators. They say that whatever the outcome, it is likely that there will need to be an on-going need to comply with new EU regulation in order to continue to conduct business across the EU. KPMG’s Head of Brexit; James Stewart says that ‘instability in our politics and uncertainty for business is the new normal. It will be up to companies to fill the void and lead the debate on how we create a new, sustainable path to growth in this country’. Deloitte claimed that the insurance sector could be one of the most impacted due to the level of regulation and interconnection between the UK and EU financial systems. They have developed a series of quick-read industry insights to summarise the implications to each sector which you can read here: https://www2.deloitte.com/uk/en/pages/global-markets/articles/deloitte-brexit-industry-insights.html.
Do you know of any other big finance stories from 2019? Let us know! email@example.com