London Partner, Didier Bruère-Dawson, was interviewed on the French network, BFM Business avec vous, where experts answer questions posed by auditors on difficulties companies are facing during the crisis.

Didier explains there are more insolvencies to come and that most of these procedures might end in assets deals. He reminds that McKinsey predicted that 1/3 of the major brands will disappear.

These companies had been restructured a few times during passed years. They were financially restructuring because some were facing over leveraged funding whereas the turnover and the margin were dramatically decreasing over the last decade.

These companies were losing considerable market shares each year while facing the end of brick-and-mortar business model, the evolution of online distribution but also the evolution of consumer habits. Consumers now prefer to buy either in discount or less but better quality. This is the end of the fits in all fashion and generally speaking of the mid-range fashion or furniture.

Some of these companies were engaging turnaround plans when the COVID-19 crisis started with subsequent confinement. They didn’t get access to the back stated guarantee funding because banks didn’t follow, likewise the credit insurance.

There was no solution when the end of holidays payments were approaching. Not only did they face a cash crisis, but they didn’t have the cash flow for investments in the new environment.

The only way to sort this out is to go to a prepackaged solution and start a new life with new business models without the burden of debt.

The situation is very similar in London, the Middle East and in New York City where Brown Rudnick works alongside companies and investors in order to find innovative solution or in setting up carve out.

Watch the full interview (in French) here.