979 jobs could go as situation worsens for UK label companies

Up to 979 jobs could be lost as the UK label industry consolidates over the next 12 months, according to the third edition 2008 Plimsoll Analysis. The unwelcome news for coincides with the British Chamber of Commerce survey which suggests unemployment could rise by up to 300,000 over the next 12 months as the UK economy experiences a ‘prolonged and bumpy landing’. 

So just how will label companies be affected and how will they respond to these challenging times? 

The latest Plimsoll analysis of the UK’s label firms sheds some light on this issue. By providing an individual analysis of each of the UK’s leading 500 companies, it has assessed each company’s chances of survival and the steps each could take to charter a path through these choppy times. The analysis found that:

• 979 jobs could go as companies seek to get costs in line with sales
• As many as three quarters of the firms analyzed will need to reduced their head count
• One of the largest firms could see up to 174 jobs lost alone
• Almost a quarter of the companies surveyed are already running at a loss
• Companies need to aim for at least 108,000 sales per employee in order to stay competitive. 

Of the 500 firms individually assessed

• 94 companies, rated as danger, need to consolidate immediately: these firms as all currently losing money are heavily in debt and are exposed to their lenders. They need to take drastic action to shrink their business otherwise their survival is in question. Some of these firms could see 30 percent of the workforce go as they try to stay in the market. 

• 191 companies need to only ‘tweak’ their business, making small but simple changes to their business will see them maintain their profitability and improve their stability. Building up their strength is vital as they aim to stay competitive. 

• 215 companies are currently leading the market with sales per employee figures of well over 158,000. These super-productive firms are generating over 7,000 worth of profit per employee. These businesses are well-equipped to see out the next 12 months in good shape and are almost certain to prosper from their weaker competitors’ demise.

David Pattison, senior analyst, commented on the challenges facing companies in the UK labels market: ‘The 94 companies we have identified as in danger need to act now if they are to survive. It very important they review their entire business cost base and take action now to significantly reduce their outgoings. Whilst job losses are undoubtedly bad news for any company, such decisive action may be called for to guarantee the ultimate survival of the business – even if this means the business is 30 or 50 percent smaller than it was.’

The Plimsoll analysis clearly names and identifies the companies most exposed to the downturn, those in pole position to prosper and those where the combination of poor performance and slowing economy has exposed them as a cheap acquisition.

This special edition of the Plimsoll Analysis exposes all the names, details and financial performance of the UK’s 500 leading labels firm. It also includes a future snapshot on each company demonstrating how each might survive this period of consolidation. It names those companies that are set up gain the most and those that need to retreat or sell up.