Well-loved Inverness firm in fight for its survival
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AN independent Inverness-based business has warned coronavirus is the most serious threat to its survival in its 154-year history.
Family-run Begg Shoes, which is headquartered in the Highland capital and runs nine stores, says it is doing everything possible to ensure the long-term survival of the business, which also includes online sales.
Although it has closed all its stores after recently buying its largest-ever seasonal range of spring and summer stock, it has retained all 41 staff on active working roles or paid furlough.
But like many small and medium-size businesses, it is facing significant cash flow problems and is calling on the UK and Scottish governments to do more to enable them to get the financial help they need.
Director Donald Begg – the sixth generation of the family to join the business – said so far the firm had not received any assistance.
“The Employee Protection Scheme appears to be the most valuable support currently on offer, with 80 per cent of furloughed staff wages reimbursed,” he said.
“The current understanding is that the reimbursement will be made at the end of May.
“This creates a significant cashflow demand for the business which will require further loan finance.”
He said the Scottish Government initiative to offer small retail, hospitality and leisure businesses a £25,000 grant per property was limited to just one property per business.
“With nine locations this does not constitute a meaningful cashflow benefit to Begg Shoes,” he said.
“Indeed, this grant represents less than one per cent of the annual overheads of the company and is equivalent to just three days’ worth of average running cash outlays. This grant must be reassessed by the government if it is to become any more than a political soundbite that suggests they are helping small businesses.”
He said the difficulties of accessing debt finance from banks had also been well publicised, but loans were in the process of being secured to pay staff wages and critical suppliers at the end of April.
“The directors of Begg Shoes recognise that this will result in very substantial financial losses for the company which will rely heavily on personal savings and debt to survive the crisis,” he said.
Is your business also struggling to access the help it needs? Email newsdesk@hnmedia.co.uk to share your story.
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