We have seen Woolworths finally disappear from the high street as a result of this recession (and not replaced with any new place yet on my local high street).
However, for all the green shoot talk, the economy remains in a very dark place. Car production figures out this week were spun as being good because the rate of decline was reducing. The top line though is that demand is 50% down year on year. Similarly in the housing market, much is made of property prices stabilising a little; but the facts are sales are 66% down on the levels of last January.
These figures show that many people have their jobs and livelihoods threatened, as the economy moves to operate at a new, lower level of productivity. Let alone the Government who will be collecting fare less taxes to try and pay back its newly minted debt.
In the corporate world, here are 3 household names whose market and finances suggest they could not last another year of this in their current form:
1. British Airways - like Woolies, BA has been in trouble periodically for years. Massive unionisation leaves it very exposed to the competition of Easyjet and Ryanair. It has lots of cash, but is burning through this very quickly. Its pension deficit is twice the size of the company and is hampering attempts to merge with Iberia. BA has strong management, despite what bitter staff say and this is a big bonus, but with demand at these levels, the company has a tough time ahead. (Shareprice wise, I can't see any value until their shares go to nearly £1).
2. Vauxhall - Part of GM Europe that has now been sold to Manga of Canada/Russia. Vauxhall makes good cars but for a small market that is suffering from huge drop in demand. With a global corporate looking to reduce its capacity in line with the new market realities, there will be big cuts and Vauxhall is top of the list. I can't see Luton remaining open and Ellesmere port must be under threat. When Longbridge was shut its factory was moved to China, perhaps a similar fate awaits Vauxhall vans and maybe cars too.
3. Comet - This UK retailer is owned by French company KESA. It was spun out of Kingfisher (now B&Q) a few years ago. High street electrical retailers have been struggling for a long-time. Main rival DSG is though still just profitable and has recently raised cash to pay down debt. Comet is in a worse position, with the parent company unlikely to risk all to save the business; in addition with a bad recession in Europe there are a myriad of ways for KESA to be losing money across its businesses. All this before US chain Best Buy comes in and starts shaking up the market this year.