Erikka Askeland: Exporters must travel that extra mile

OH, DEAR. That crashing sound heard back in the third quarter of the year was the collapse of Scottish export activity, according to the Lloyds TSB Scotland quarterly Business Monitor.

In the previous quarter, exports seemed to be on their uppers with a net balance of 10 per cent. But the following three months, the same balance – which is the aggregate answer from more than 400 Scottish businesses on being questioned if activity is up, flat, or down – was a shocking minus 17 per cent.

This had the effect of sinking expectation of trading abroad for the next six months like a stone in the Firth of Forth, with a positive 21 per cent swinging dramatically to a negative 15 in only three months.

The poor show is unsurprising, considering that a good deal of the bulk of what we ship out is usually destined for European markets, where consumers have been too busy rioting in the streets to wash down langoustines with whisky. But it is disheartening, especially when the only way to drag ourselves out of the economic mire, shifting away from our comfy but unsustainable consumer-driven economy, is by trading with markets that can afford to buy what we sell.

Can the giant pandas residing in Edinburgh Zoo save us? Clearly, China is an important market to break into while Europe goes “ex-growth” and the debt-burdened US economy starts taking on an eerie resemblance to Monty Python’s unhappy eater, Mr Creosote.

As Tian Tian and Yang Guang arrived, Alex Salmond was racing across China in a concerted stint of ceremonial handshaking with dignitaries, which needs to be followed up by the hard slog of actual trade – a much more challenging and complex prospect.

Nor must we put all of our efforts in one bamboo basket. The emphasis of our public and private trade support organisations, the Scottish Development International and the Scottish Council for Development and Industry, respectively, are also now emphasising trade links with India, Russia and the far East.

Donald MacRae, the chief economist of Lloyds Banking Group Scotland who oversees its quarterly reports, insists that despite prospects for economic growth grinding to a halt there is still hope of avoiding a double-dip recession in the next six months, but he can’t go so far as to rule it out.

The move into these faraway markets will represent a significant wrench for business travellers more accustomed to short hops to Schipol, but now is the time to start going the extra mile.

Landlords key to saving our ailing high streets

ThAT other crashing sound heard just a few days ago was the first post-Christmas failure of a retailer. The administrator of Ayrshire-based D2 Jeans shut 19 stores on Wednesday – six in Scotland – while keeping its fingers crossed that it would find a buyer for the remaining 28 stores.

For its owners, Jim McGonigle and Alan Kinney, it is just like a repeat of Christmas 2009, which was the last time they had to call in receiver James Stephen from BDO to sort out the flailing business.

That was just a year after they bought out their business partner, Sir Tom Hunter. But it is unclear if they will have the nerve or the wherewithal to buy a slimmed-down version of the fashion chain in a pre-pack a few weeks later as they did last time.

Accounts for D2, which is registered as A&J Menswear were supposed to have been filed in October, which is usually a sign of trouble. In 2009, the firm’s problems largely related to paying its quarterly rents, which traditionally fall due on Christmas day. This bill is what is expected to land like the giant blob from outer space to envelop a number of retailers in coming weeks, forcing them to shut their doors.

The retail industry has been lobbying for a change in the way rents are charged, to a more practicable and less unwieldy monthly payment. Others have even tried to play hardball, in the form of company voluntary arrangements, where stores can continue trading while negotiating lower rents with landlords on bills that would otherwise bankrupt them.

If you look at the stores that D2’s administrators have closed – in Clydebank, Falkirk, Glenrothes, Hamilton, Irvine and Paisley against those that remain open – it is like the scary ghost of Christmas future for failing Scottish high streets. Landlords there will have to do more to save what retailers remain.