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Most noticed business news stories in June 2018

Job losses from major retailers and manufacturers dominate the business news this month.

More retail pain

Another month; another round of retail collapses and desperate corporate restructurings. This month discount retailer Poundworld collapsed and its cousin Poundland begged creditors to agree radical debt restructuring plan.

House of Fraser has put 6000 jobs at risk with the announcement that it is closing 31 of its 59 stores including its Oxford Street emporium.

Since the beginning of the year high street brands in the retail and restaurant sectors, including Toys“R”Us, Maplin and Handmade Burger Co, went to the wall and many more, including New Look, M&S, Byron and Carluccio’s, announced that many of their outlets would shut.

Insolvency experts are already dubbing 2018 as the “year of the Company Voluntary Arrangement”, an insolvency procedure used to push through store closure programmes.

The Press Association estimates that 50,000 people in the retail sector have been made redundant or have seen their role put under threat in the first six months of 2018.

Manufacturing uncertainty

On the other side of the coin, major manufacturers are also threatening huge job losses.

Airbus confirmed that it may no longer build aircraft wings in British factories, due to Brexit uncertainty.

Both BMW and Rolls Royce also indicated that they would be forced to enact contingency plans involving thousands of UK job losses, if a transition deal could not be agreed.

Ian Roberson, CEO of BMW UK said,

“If we don’t get clarity in the next couple of months we have to start making those contingency plans… which means making the UK less competitive than it is in a very competitive world right now.”

With just this month’s announcements from major manufacturers, up to 100,000 British manufacturing and support jobs have been put on the line.

Government leadership

Both retailers and manufacturers are crying out for strong leadership. The TUC’s general secretary, Frances O’Grady said

“Government needs to up its game, boost the economy and invest in great jobs that people can live on.”

The retail sector, dogged by over-supply, a fall in the value of the pound, increasing business rates and structural disruption from online operators is looking to the Government for support.

Major manufacturers crave some kind of Brexit certainty so that they can plan for a future either inside or outside of Britain. Neither is getting any joy.

With the Cabinet riven by division over Brexit, the Government appears frozen in a standoff with itself while jobs are lost and the lives of UK workers and their families are harmed.

Last week the prime minister said:

“It’s right that we listen to the voice of business. Business is at the heart of how we are going to develop this country. We want to ensure we are listening to the business voice because business provides the backbone of our economy.”

But leaders must lead with actions as well as words.

The longer the Government argues with itself and puts off action with fine words, the more its reputation drains away.

David Racadio

David is responsible for Populus's industry studies, which help clients in a range of sectors, including banking, insurance, food manufacturing, pharmaceuticals and retail, to benchmark their corporate reputations and understand the attitudes of key stakeholders that impact on their industry.

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