Introduction

The most obvious story about business that could come from lockdown is one of the severe economic strain that will be experienced as a result of the drop in consumer demand that occurs when people are no longer able to move freely. Short-term government intervention will postpone insolvency. The employee furlough scheme aside, this intervention has taken the form of the cancellation of business rates for particular industries (retail, hospitality and leisure) with a cash grant scheme targeted at smaller businesses in those sectors. Other industries, such as fishing, have been similarly supported. Businesses occupying low-value properties have been given small business rates relief. Small-and medium-sized enterprises have been reimbursed for 14 days of employee sick pay if the absence is COVID-19-related to include employees who were self-isolating as well as those who were sick.

However, this support has been insufficient for some businesses. As lockdown has eased there have been numerous announcements of businesses, particularly in the retail, hospitality and consumer goods manufacturing that will not resume trading – for example, Harvey's Furniture, Victoria's Secret, Antler Luggage, Quiz and Debenhams have all announced that they are in difficulties. Large concerns like these will be able to sell their brand name or continue to trade while in administration or under a voluntary agreement as they search for a buyer or reach a settlement with some key creditors; others have announced that they will restructure and trade only in some markets, using particular channels, for example Feather & Black will move to a concession and online business only, and Cath Kidston will be online-only in the UK with stores in Asia. Some smaller corporations will continue as ‘zombie’ companies unable to increase productivity because of the cost of servicing their debts but still crowding out of the market healthier and more innovative rivals.

Business failure on this scale usually offers an opportunity to critique the adoption or not of innovation, the adaptation or not to changing markets and consumer preferences, the ratio of loan to equity capital, the quality of management decisions and so on. However, the light shone by the UK lockdown which required all non-essential businesses to close by 26 March 2020 and its staggered reopening by mid-June illuminated the practices of an apparently successful business.