Thursday, 9 April 2009

Reorganising your business is the new black

Fashionista has been following with interest the recent press coverage on Philip Green's plans to merge the Arcadia and Bhs businesses and, more recently, Speciality Retail Group's restructuring plans to combine some of its functions with BMB Group. Particularly in the current economic climate, it follows that businesses look for ways of reducing their costs by reorganising certain functions of their business. Typically this can be achieved by consolidation of some kind in order to reduce administrative costs or combining the financial performance of businesses previously conducted through separate subsidiaries.

Fashionista is aware that it is tempting to take a less formal approach when documenting intra group transactions, it is important for corporate governance reasons that a thorough approach is taken to any reorganisation and that the transaction is documented properly, particularly if the reorganisation is likely to come under scrutiny by third parties in the future.
There are also a number of particular company law issues which need to be addressed. So while reorganisations are an excellent way for businesses to potentially cut costs and save money, as any fashion savvy person knows, it is crucial to have the right advisors on board to ensure you do it in right style.
By Amanda