Tag Archives: # payment delays in France

In France, the number of companies having been the subject of a bankruptcy procedure decreased

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lower banruptcies rate

decrease of bankruptcies in France

In France, the number of companies having been the subject of a bankruptcy procedure decreased by 4.8% last year compared to 2018. There were 52,000 failures in 2019. These are 2,500 companies less than in 2018 who went to bankruptcy or were placed in receivership or safeguard proceedings. In the fourth quarter of 2019 alone, the decline even accelerated.  The improvement is visible in almost all trades. The number of liquidations has dropped significantly. In construction, trade, industry, business and personal services, and catering, bankruptcy is declining sharply. Road freight transport and IT and communications are sectors which experienced an increase in bankruptcy last year. One of the explanations for this good overall performance in 2019 is that household consumption held up even if it was not as dynamic as we might have expected. The domestic economic context is rather better than that of our neighbours. Job creation is still strong in 2019, which also contributed to good economic activity. Second, interest rates are still very low, which helps companies finance themselves at lower cost. After the crisis of “yellow vests”, the State was able to support companies in difficulty.  Small businesses have held up well last year if they haven’t fallen, that doesn’t mean they are doing well. Many suffer. The treasuries continue to be strained. Another fact that puts the drop in corporate bankruptcy a bit into perspective last year, many SMEs and even a few mid-size companies have experienced difficulties. Almost 350 SMEs with more than 50 employees went to bankruptcy in 2019, almost one per day. In the last three months of the year, 100 failed. The difficulties of SMEs are concentrated in the manufacturing industry. Some face forced transformation issues linked to sustainable development, in the automobile for example. As a result of the bankruptcy of SMEs, the number of jobs threatened by bankruptcy increased slightly in 2019, by 1.6%, to 175,000. How will the coming year go? Growth is expected by economists to a level comparable to that of 2019, that is to say from 1.2% to 1.3%. For 2020, there is no fear of a sharp increase in the number of bankruptcy but it seems unlikely that we will fall below the threshold of 52,000 collective proceedings. We could be around 53,000 failures for the year 2020.

 

Hypermarkets in France a new deal. A lot of Hypermarkets make losses.

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Hypermarkets the new deal

Hypermarkets in France

Hypermarkets in France a new deal.

In France, consumption declined in most Hypermarkets in 2019. The glass is half empty or half full. Optimists will find that two thirds of the Carrefour Hypermarkets in France make money. Pessimists will point out that a third of the park pulls down the result of the branch. The issue is also sensitive to Auchan, the other chain of very large Hypermarkets. In its December issue, the trade magazine “Linear” examined the “evil of self-service hypermarkets” and advanced “the real numbers”. The trade magazine recalls that the self-service hypermarkets Carrefour, Auchan and Casino recorded sales of 2.7 billion euros between 2014 and 2018, of which one billion for the first two. Consumer habits are changing. Consumers commute less and tend to local supermarkets. The shift from non-food shopping to e-commerce and specialized supermarkets also explains the dissatisfaction of certain Hypermarkets. “Linear” keeps its figures from union sources. According to this information, the decline in sales is associated with a decrease in profitability. Carrefour France’s hyper integrated and franchised companies reportedly had a current operating deficit of 132 million euros in 2018. For comparison: Auchan Retail France generated a profit of 479 million in 2014. Operating profit (80% of activities are carried out by Hypermarkets) decreased to -155 million. The magazine also confirms that “89 businesses would make losses” at Carrefour Hypermarkets SAS ‘191 locations in 2018. The Carrefour Group does not comment on these figures, which it does not publish. In an interview with “Linear,” Marie Cheval, general manager of consumer markets, only states that 41 Hypermarkets will launch Rebond, “an operating model that inspectors entrust to directors to compensate for deteriorating profitability.” Dejan Terglav, General Secretary of FGTA-FO from Carrefour, responds to “Les Echos” and assesses all these figures as “likely”. He fears that the group will default to leasing around twenty hypermarkets. Carrefour has started to revive its consumer markets. 2018 is the first of the Group’s transformation plan that has invested particularly in competitiveness and prices. This strained numbers and margins. Kepler Cheuvreux underlined this “conscious strategy”. Since then, sales space reductions have been initiated, such as the rental of space to Darty. The Hypermarket soldier needs to be saved.

B to C debt collection costs in France a nightmarish situation when debtor is an individual.

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B to C debt collection costs in France a nightmarish situation. The B to C debt collection costs in France were the subject of a new judicial decision dated September 26, 2019. This decision concerns the collection costs charged to individuals by the collection agencies. The decision of the Administrative Court is as follows. The collection of damages from the debtor must, except to qualify as deceptive marketing practices, be preceded by a justification of the nature and amount of the damage alleged. According to the judges the only fact for the administration to note that neither the proof of bad faith, nor that of the reality and the quantum of the damage, were reported, was sufficient to reclassify the damages and interests in debt collection costs constituting deceptive marketing practices. The burden of proof of the bad faith of the debtor and the loss suffered is on the creditor. Failing this, the collection firm is exposed to heavy criminal penalties for deceptive marketing practices. The context of this decision is related to the practices of some French recovery firms that try to make debtors pay damages by referring to Article 1231-6 of the Civil Code. The root of the problem is related to the small amount of the claims in the B to C files. To make their actions profitable some collection firms do not hesitate to claim substantial damages from the debtors to cover the debt collection costs incurred. The Court’s decision confirms that in practice and for debtors with a private person status, it is in fact impossible to claim recovery costs except to risk very heavy penalties. How to produce receipts for debts of a few tens of euros. And it is equally true that not paying small bills for an individual is a real lawless area, the debtor not in fact risk anything to pay his bills when he sings, if he decides to pay. No one is going to expose the debt collection costs of proceedings for a claim of a few tens of euros.

Hedge Fund the rise of one whom nothing predestined to become the best manager of history.

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Hedge Fund the rise of one whom nothing predestined to become the best manager of history “The man who solved the riddle of the markets” Wall Street Journal’s Greg Zuckerman’s book is the book that everyone is talking about on Wall Street. He portrays the rise of one whom nothing predestined to become the best manager of history. The mathematician Jim Simons, whose fortune exceeds 23 billion dollars, is at the origin of a UFO: the Medallion fund. Since 1988, this quantitative hedge fund has recorded an average annual gain of 66.1%, reduced to 39% after deducting its commissions. Over 20 years (1985-2004), George Soros’ hedge fund (Quantum fund) had an average annual return of 20.2%. Prize of excellence Aware of its value, the Medallion Hedge Fund has taken the highest rates in the industry, 5% of assets and 44% of profits generated through its performance. Hedge Fund typically take between 1.5% and 2% of assets and 20% of profits. Given its success, this Hedge Fund no longer accepted money from investors since 1993. In 2005, it was reserved exclusively for employees of the Hedge Fund. For Simons, this fund was to remain relatively small, less than $ 10 billion, to continue to perform well. The founder is aware of the law of diminishing returns in the financial world: the more the capital is important, the more a manager is struggling to remain as efficient.

Inconceivable In an interview with “Institutional Investor” in November 2000, the founder of Renaissance said: “Today we manage $ 4 billion, perhaps $ 7 to $ 8 billion in the future. But 70 billion, never! It is inconceivable. I am 62 years old and in the next three years I would like to pass the torch. Today the Hedge Fund manages $ 110 billion, and Jim Simons retired in 2010 while remaining involved in his company, being non-executive chairman. The Medallion has been a fantastic Hedge Fund appeal and advertising product, which has launched other funds such as Renaissance equities. He managed the increase in his assets and the change in size of his fund. “Make money when I sleep” In 1978, Jim Simons left his position as professor of mathematics at Stony Brook University to found his first Limroy Hedge Fund. Like other traders of the time, he tries to anticipate the decisions of the Federal Reserve but without much success. Yet at the time, he consulted the opinion of an economist, Alan Greenspan, who would become the president of the Fed between 1986 and 2007. His poor results prompt him to seek a trading system without human interference. “I do not want to worry about markets every minute. I want models that make me earn money when I sleep. He then embarked on quantitative management in the futures markets, particularly commodities. It speculates on potatoes, oil or pig carcasses but again the yields are random. The Hedge Fund, Renaissance Technologies, which was born in 1982, decided to move up a gear and began to build systematic and rigorous quantitative management. “There are movements and configurations in the markets that are not ‘visible to the naked eye’ by traders, but Renaissance wanted to exploit these anomalies in a systematic and rigorous way,” says Greg Zuckerman. Grey matter The fund is progressively recruiting the best mathematicians, astrophysicists, linguists, artificial intelligence specialists and computer scientists. It ensures their loyalty by allowing them to invest their bonuses in the Medallion Hedge Fund, where the average investment of employees is now around $ 50 million. Those who leave the company are subject to very strict confidentiality agreements and a non-competition clause over a very long period. It is not possible that they go into another Hedge Fund to disclose the secrets of the company.

The “home culture” of Renaissance, the antithesis of that of Hedge Fund of the time, was in three words: humility, patience, work. No star manager took positions according to his “instinct”, a word banned internally. His traders had to follow the signals of mathematical models and never take personal initiative. In fact, very few Wall Street professionals have been recruited by Renaissance who prefers to hire IBM alumni. The Medallion fund also invested some of its money in about 40 Hedge Fund. It was a way to seize opportunities that he had not identified himself while benefiting from information feedback on the markets. Data gathering. To help it achieve good market forecasts, this Hedge Fund was one of the first to recognize the importance of having as much financial data as possible. He has collected very old and good course histories. Databases often contain errors that a statistics specialist was responsible for flushing out and correcting. The fund was collecting data that was not available to its competitors: one of the contributors regularly went to the New York Fed in Manhattan to manually collect prices on bonds that were not public. Anticipating the rise of “high frequency trading” (ultra-fast trading machines), the fund invests early in technology and computers at the forefront to increase the speed of its transactions and be the first to seize opportunities. The “gross” anomalies in the markets have long since disappeared and the fund must innovate to remain efficient. “The mathematics we use can be sophisticated,” he told Institutional Investors, “but we start from data analysis, we do not have preconceived notions.” “In our business, we want action, we appreciate a certain level of volatility. In 2008, the year of the financial crisis, the Medallion fund jumped by 80%.

 

Business failures in France

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Business failures in France. It’s an encouraging signal for the French economy: French companies are less likely to experience Business failures. Their number was 10,500 in the third quarter of 2019, according to the count made by the company Altares, down 6.4% compared to the same period last year.

This is an exceptionally low level, unmatched since 2007. The improvement is notable in construction, retail, catering and personal services. Even sectors such as business services and industry – particularly agribusiness – are experiencing a decline in Business failures.

Increase in claims of large Companies

All is not rosy however, since the average size of the failing companies increases. Thus, 73 companies with more than 50 employees went to court in the third quarter for Business failures, against 56 at the same time last year. As a result, the number of jobs threatened by these Business failures is growing. Nearly 37,300 jobs are at risk, 2,350 more than in the summer of 2018. These Companies alone account for nearly one third of jobs at risk.

“It has been several quarters since the Business failures of large Companies increase quite markedly,” said Thierry Millon, director of studies of the company Altares. Children’s clothing stores Orchestra, the airlines eagle Azur and XL Airways suffered disappointments last quarter.

Threats in the fourth quarter

Why are some large Companies experiencing more Business failures than before? “The activity has been pretty good since the end of 2015, but some companies have used their money to manage their working capital needs and not to solidify their growth. Today, with the slowdown, they are in financial difficulties, “says the expert who also notes” a degradation of payment behaviour since the spring. ” Vigilance is therefore in order. With a particular focus on the fourth quarter, marked last year by increased difficulties for some businesses and in the restoration because of the movement of “yellow vests”. However, this winter, the public transport strike on the pension reform is threatening.

Signs of weakness in the automobile and construction

Without large-scale social movement, “this year, the number of Business failures should be around 53,000, down from 2018 when France had experienced 54,700 Business failures, according to Thierry Millon. Again, this would be the lowest level since 2007. Even if it should remain low next year, the loss ratio will however hard to maintain at this low water level next year. “Some sectors are showing obvious signs of weakness. This is the case of the automobile or construction for example, “said the leader of Altares. On the other hand, companies should be able to count on the expected healthy performance of household consumption.

General terms and conditions of sale between professionals in France mandatory information’s

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General terms and conditions of sale between professionals in France mandatory information’s.

Obligation of companies

In France the basis of commercial negotiation between professionals, the General terms and conditions of sale must be communicated to buyers who request it. Which mentions should be included? How to communicate them? What sanctions in case of non-compliance with these obligations?

Between professionals (B2B), the General terms and conditions of sale must be communicated to buyers or service seekers who request it. In this case, they must respect specific rules both in terms of their drafting and their mode of communication.

This obligation to communicate the General terms and conditions of sale between does not apply if no customer requests it.

The mandatory mentions of the General terms and conditions of sale between professionals

When they are formalized, the General terms and conditions of sale between professionals must obligatorily include a number of mandatory information provided for in Article L.441-1 of the French Commercial Code. They must include:

  • Settlement terms (including terms relating to payment terms, penalties for late payment and recovery fees)
  • Any price reductions and discount conditions
  • The unit price scale.

Particular mentions

The General terms and conditions of sale may also include optional information such as the terms of termination of the contract, clauses relating to cases of force majeure (natural disaster for example), retention of title or limitation of liability of the seller.

The rules of communication of the General terms and conditions of sale between professionals

If no particular formalism is required by law, the general conditions of sale must be fixed in writing, by any means constituting a durable medium. Generally, the general conditions of sale are found on pre-contractual documents (advertising documents, etc.), contractual documents (purchase orders, contracts, etc.) and annexes (signs, posters affixed to points of sale, etc.). ).

It is possible to establish general conditions of sale differentiated according to the category of buyers of products or applicants for services. To define its categories of buyers, a distinction must be made between:

  • Wholesaler or trader (B2B) buyer
  • Supermarkets
  • Any specialized company
  • distance selling businesses.

The obligation to communicate the general conditions of sale applies only for professionals of the category concerned. The supplier can therefore write as many different terms and conditions as there are categories of buyers.

 

What sanctions in case of non-compliance with the general conditions of sale between professionals?

In the event of a breach of the drafting and communication requirements of the general conditions of sale, Article L.441-1 of the French Commercial Code provides for an administrative fine of up to:

  • € 15,000 for a natural person
  • 75 000 € for one personeiffel-tower-1156146__340

Payment delays : How to find 20 Billions € in France?

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Payment delays : The most recent figures and surveys in France shows that if the legal payment delays are respected the small and medium French companies (with less than 50 Million € turnover) would improve their cash flow situation with 20 Billions € a year.
The unpaid invoices and payment delays generate a lot of costs inside and outside of the Company:
Internal Management of the payment delays, costs related to the financing of the outstanding sales, debt collection costs, litigation costs.
In France the companies which are far away from the consumer are those with the most of the problems concerning the payment delays from their clients (forwarder, logistic, storage, business services)
In the Business to Business filed the costs per Invoice for the management of the payments are around 609 €!
In the Business to Consumer field the costs for the management of the payments are more or less equal to 6 % of the company turnover. The reason is that the French law exonerate the private customer from every kind of liability in relation with the non-payment of their invoices.
Georges Vonfelt
www.gevo.fr