The competition in the High Street across the Casual Dining and Fast Food industry has never been as intense as it is now.
While a number of brands continue to thrive, new brands popping up, offering the latest experience in grab-and-go Asian, Pasta, Mexican & Vegan to name just a few, has resulted in a few well documented cases recently of this growing competition leading to financial difficulties for some of the UKs best known chains. You may have seen the recent media coverage of the likes of Prezzo and Carluccio’s entering a CVA process, for example. However, as a prospective employer, a CVA is not the doom and gloom it may first seem.
What is a CVA?
In Lehmann’s terms, a CVA is an alternative to Administration, whereby an agreement is made by the company with its creditors to carry out a repayment of its debts with mutually agreed terms, with the basis often being a renegotiated value or timescale.
Why a CVA?
As opposed to an going into Administration and winding up, in a CVA case, the Directors of the business can stay in their position. What this frequently means is that these Directors are required to change the strategy of the business and streamline areas which may have previously been overlooked.
It is a much less public affair than a company going into Administration. The less press coverage and scaremongering available to the public and customers, the less long-term financial impact it is going to have on the business.
Although 75% of creditors are required to agree to a CVA, for those that are in agreement this means that they get to retain a customer in the long term and still receive a value of the debt owed. In an ideal supplier/customer relationship, payments are made on time and in full but let’s be realistic, this is business and all industries and companies experience difficult times and nothing is more valued than long-term professional relationships between businesses.
Why work for a company that has been through a CVA?
Being approached to work for an organisation that has gone through such troubling times can be daunting, but it does not necessarily spell danger for your career and job security. The likes of Carluccio’s and Prezzo are testament to the positive outcomes that can be had by going through the process and coming out the other side.
The exposure you can get from an Accounting point of view in this situation can be excellent; being involved with strategy review, stakeholder management, commercial decision making and key financial analysis can be great, especially if it is a turnaround project and you can assist in getting the company back on track to its profit targets.
There will be a need for you to carry out due diligence in this instance, analysing the published accounts, speaking with those within the business and understanding exactly where they are at this moment in time and there will be times where it may be too much of a risk. However, if there’s an opportunity to make an informed decision, go for it; it might prove to be one of your most valuable career moves.
If you are interested in discussing new opportunities across the Hospitality sector, get in touch with on 0203 854 1818 or e-mail me on firstname.lastname@example.org