House of Fraser are at loggerheads with warehouse operators as they have started business debt collection strategies towards the high street giant. The store has stopped online orders while the situation is resolved.

In June, we wrote about company voluntary agreements. The article focussed on the decline of high street giant House of Fraser. Since then the company has been subject to a buyout by Sports Direct owner Mike Ashley. Even despite this, the company continues to struggle. A CVA may still be required however if Ashley doesn’t resolve outstanding debts. Despite the buyout, some creditors still dispute balances of over £30 million.

House of Fraser

Business debt to halt trading?

With the situation becoming complicated, changes are apparent. The House of Fraser website is currently down with a message pertaining to improvements. The company is also cancelling or postponing a large portion of orders. With various disputed debts, the future is very uncertain for the chain. Despite Mike Ashley hoping to make it the “Harrods of the high street”, the company is in a rough period.

Regardless of the outcome, business debts can have huge effects on day to day operations. Lingering debt is a horrible prospect even at business levels. While debt in business is common (with credit offered often), when it piles up, it creates strains on daily budgets. The debt owed to warehouse operators has been disputed by Ashley. The result however is the downing of tools forcing daily operations to cease. The longer it lasts, the more damaging to the company the dispute could be.

Dealing with dispute

Creditors have numerous ways to deal with disputes. Thankfully for the warehouse operators, their format directly hurts House of Fraser. Many creditors may not have this luxury. Debt collection between businesses is surprisingly common. This is even after signing contracts and evidence produced in the form of receipts and invoices.

When a company is found to be in heavy debt, they can opt for a CVA as we wrote about. We also wrote that for some creditors this is a terrible outcome. For smaller creditors of House of Fraser, business debt collection agencies could be the most appropriate answer. Our job is to remind and communicate with the debtor over disputes and work a solution. CVAs don’t provide that chance. With an agency on board, it gives a much better chance of successful repayment.

Last year we described the role of debt collectors and why we operate. What benefits we provide and how we work. For smaller businesses, debt collection can be essential to maintaining liquidity. Having a positive cash flow requires regular payments from creditors. Some smaller companies also rely heavily on larger debtors’ contracts to remain afloat. When this is in jeopardy, business debt collection may be the best answer.

House of Fraser cellphone

Use the experts

For assistance with recovering business debt, AYOM are here to help. For a consultation and advice on collection processes, call 0800 130 3357. You can also email enquiries@ayom.co.uk. Business debt collection is pivotal for cash flow. Be safe of mind if your business is owed money and call AYOM today for details.