Silverback Law partnership
Silverback Law partnership
Baker Ing welcomes Silverback Law to our roster of international partners.Specialising in all aspects of commercial debt recovery and litigation, Silverback deliver precision enforcement solutions.
A step-change in our data capabilities.
We are proud to announce a step-change in our data capabilities with the addition of real-time credit risk feeds, shared payment intelligence and predictive analytics. This will transform the way we monitor, manage and respond to changing debtor risk on your behalf. These enhancements are being rolled out presently and will be deployed to all client accounts over the coming weeks. Please contact Gemma Griffiths for more information in the interim.
Fashion & Apparel 2022
Fashion & Apparel 2022
What fashion-company casualties will there be now that we are moving back to a more normal trading environment? What impact will the shift have on companies who restructured their operations to survive lockdowns? Will they need to adapt once again to meet the needs of a new commercial environment, and are they capable of doing so quick enough if so?
With strengthening global trading conditions, there is much for the fashion industry to be positive about as we move into 2022. However, times are changing for the industry – if not, already changed. Just one example of the change we are seeing is stated in the Global Clothing B2C E-Commerce Market Report by Research and Markets which forecasts that over 50% of retail growth globally is expected to derive from online sales between 2020 and 2025. As with any structural changes, there will be those that manage to adapt quick enough to thrive, and those that fail to.
The pandemic of the past two years hit the fashion industry hard. Retail fashion was, at the beginning of 2020, still heavily reliant on footfall in physical shops. Further, the disruption to global trade generally had wide ranging and profound effect on fashion, from routes to market, to labour availability, supply chain management and marketing cycles. Sales fell, orders were cancelled, and inventories built up. Where businesses were able to adapt, they most often operated far below their volume capacities, with both increased operational costs and, in many cases, capital investment required in order to adapt, with consequent profit margin shrinkage.
As well operational disruption, we’ve further seen profound shifts in consumer demand over the past two years. Lockdowns drove down demand in the luxury, formal, accessories and beauty segments whilst increasing demand for leisure, active and comfort. This further disrupted businesses’ product development and marketing cycles, as well as profoundly impacting those with less diversified product ranges.
As we move into 2022, the industry now faces old challenges but on a new scale. Input shortages, logistical constraints and inflation are challenges the industry knows only too well. However, it now faces these old challenges in a weakened financial state, during a time of market volatility, and structural changes in consumer tastes and behaviours. Retention of Title is something credit managers need to secure post COVID, with the rise of both insolvency and phoenix companies. We have seen assets and goods being moved between different trading entities and shops, as well as being sold online through platforms such as e-Bay, Vinted and luxury-fashion second-hand sites.
Nonetheless, even though the most pressing challenges are the old enemies of inflation, supply-chain disruption, and cost-control, its vital to consider the new context these old challenges approach us in. Not only has the industry been weakened financially by the lockdowns but, the past two years has rapidly accelerated fundamental changes in the industry which must be considered too:
Social Responsibility
Social responsibility, for want of a better term, was both a building consumer trend and a political force before COVID. Over the past two years though, for a variety of reasons better left to sociology professors to dissect, we have seen social responsibility come very much to the fore – again, both politically and as a consumer trend. This was driven in large part by the increasing influence of younger consumers but has very much spread wider than that demographic to the point that socially responsible value judgements are now arguably the desired consumer standard, with anything falling below the perceived bar being deemed unacceptable and undesirable.
Interestingly it is the polar-opposite ends of the industry which have been most effected so far. Both the luxury and ‘fast-fashion’ segments have come under heavy scrutiny and companies have had to act. In the luxury segment, we see a subtle shift in marketing away from purely a positional-goods value proposition (i.e., exclusivity) to one of social values and association with those values via the brand. Equally, at the other end of the scale we have seen manufacturers focus action on sanitizing their supply chains and offsetting environmental impacts.
With the political and cultural Zeitgeist seeming to grow ever more enthusiastic for social responsibility in all its forms, it will be interesting to see how the industry can adapt to this new paradigm, being as it impacts both operational practices of companies, as well as influences consumer demands and behaviours. For example, younger consumers seem very happy to purchase second-hand luxury goods or will forego brands entirely which are perceived not match up to their high standards of socially responsible behaviour. How to square these thoroughly uncommercial values with the need to maintain sales volumes and margins is a problem not yet solved. That said, we have seen some shifts to this end, such as changes to manufacturing inputs, as well as marketing in many instances moving away from a trend-focus to more emphasis on timeless quality.
Regulation
Linked to the above trend of social responsibility, it seems 2022 may be the year of regulation for the fashion industry. If social responsibility is the cultural trend influencing companies to change in line with their consumer’s demand, then ESG is the big stick of government demanding change. It is a topic we have covered previously and too large to cover here but, needless to say, the Environmental, Social and Corporate Governance values codified in the ESG standards currently being applied by many financial institutions, and expected to be rolled out widely, could have profound effects on companies’ ability to access finance and professional services.
As well as the potentially existential threat which ESG standards could well be to certain segments, we also have a raft of other legislation recently introduced or incoming in 2022 which will impact all fashion companies; new European online sales legislation, the UK’s Green Claims Code, France’s carbon labelling and ‘anti-waste’ laws, the USA’s strengthening of the Garment Worker’s Protection Act…and probably more to come!
The fashion industry is under pressure to adapt faster than it would like and some segments don’t yet have a solution for their long-term survival.
Route to Market and Digitization
It goes without saying that the shift to online dominance is almost complete now. Those that have not yet managed to integrate digital channels into an omnichannel route-to-market strategy are most likely not with us any more….or won’t be for long. The best businesses are now focusing on how they integrate their digital and non-digital channels across the customer journey to really make the most of this new paradigm.
However, with the pervasiveness of new technology throughout companies’ operations, often adopted at speed over the past couple of years, we must be aware of the threat of cyber-attacks. This now represents a significant and widespread risk and it is imperative that credit managers are knowledgeable about the measures companies need to take to mitigate the risk.
Conclusion
Whilst there is much to be optimistic about as we enter more usual trading conditions, there is no doubt that the fashion industry in under severe pressure, being impacted more than most by the old challenges of inflation, supply chain management and cost-control. What is particularly concerning is that the industry faces these challenges from a weakened financial position after two years of restrictions, as well as being buffeted by some profound and rapid changes in consumer demand/behaviour, whilst fending off increasingly interventionalist legislation around the globe.
So, optimism is appropriate as we enter 2022 but, we must be vigilant of the high-risk environment fashion companies are operating in.
Cautionary tale 1 – international group goes into administration:
- Trinity Group
- Trinity Group is a Chinese-owned up-market fashion conglomerate. It owns several ‘heritage’ fashion businesses, including Kent & Curwen, Gieves & Hawkes, D’Urban (Japan) and Cerruti.
- The Group went into administration early in January 2022 and is understood to be heavily indebted. Administration is thought to have become essential when it failed to find a buyer for its Gieves & Hawkes subsidiary.
- A majority stake in Trinity is owned by Shundong Ruyl International, based in China. This does not mean that its subsidiaries are now in administration, but they have become assets in a struggle to find a way that will repay most to Trinity’s creditors.
- The least likely outcome is a solvent third-party acquiring Trinity. The most likely outcome is the sale or disposal of the main subsidiaries, including; Gieves & Hawkes, Kent & Curwen; D’Urban (Japan), and Cerruti and Cerruti 1881.
Cautionary tale 2 – poor footfall forces administration:
- Kesslers International is a major retail display business formed in 1888.
- It was put into administration by its owner, the Hexcite Group, in December 2021 after trading at a loss for several years.
- Sales for the most recent year were £20m.
- Out of 160 staff, 125 have been made redundant.
Cautionary tale 3 – luxury brand fails:
- Ralph & Russo, is a high-end fashion house with 450 employees.
- The business was set up in 2006 and opened stores in London, Europe and the Middle East. It sells couture, bags, accessories and shoes.
- The company went into administration in March 2021.
- Ralph & Russo was bought out of administration in July 2021 by Retail Ecommerce Ventures (owner of Dressbarn, Steinmart and Pier 1).
Download the Report: https://bakering.global/product/report-fashion-apparel-europe-2022/
Happy New Year 2022
Merry Christmas
A very Merry Christmas to all of our clients, partners and friends. We sincerely hope you all are able to enjoy this time and we look forward to seeing you again in the New Year.
Meet Claire Goode, Director of Service and Operations.
1. What's your background?
I've worked in the credit management profession for almost 20 years now, in variety of operational support roles. Over the years, I have developed a well-rounded skillset focused on driving operational efficiency, for both clients and internally, through statistical analysis, process engineering, and ongoing performance management of internal teams. My work, although primarily internal, has always had a big client focus though, and throughout my career I have had responsibility for ensuring smooth client onboarding and customer service excellence.
2. What is your role at Baker Ing?
Director of Service and Operations. I will be responsible for ensuring client interactions with Baker ing continue to be efficient and exceed expectations by ensuring we are responsive to their needs, available when and how they need to communicate with us, and that our internal processes, systems and technologies are aligned to deliver outstanding client service.
3. What do you bring to the table?
I've spent my entire career in the credit management profession from office junior through to managing whole departments. This has given me the chance to learn every aspect of how the businesses operating within it function, their needs, expectations and their challenges. I think my focus on detail with a big-picture understanding is quite rare, and I hope to use this to help Baker Ing consistently exceed client expectations.
4. What made you want to work for Baker Ing?
Being part of a business from it’s inception was very appealing to me - I feel like I really have a stake in everything Baker Ing do, due to the personal pride I have in what we, as a team, have accomplished thus far. I also come to work each day with a genuine excitement about what we can continue to bring to the profession in the months and years ahead.
Having worked with Sarah, our COO, for the best part of 15 years, and with Lisa, our CEO, for almost 10, this was a prefect fit for me - an exciting and fulfilling venture with a team I believe in, and who believe in me.
5. What do you like about working in credit?
Credit was my first ‘real’ job at age 17. From the first day, I've always enjoyed learning new things about the credit profession and progressing my career within it. Working in credit has also given me an insight into a multitude of industries – it affects every business, all over the world, which I find fascinating. Finally, knowing that my work within our business will help our clients flourish gives me an ongoing sense of achievement.
6. What do you want for Christmas?
To spend time with my family and loved ones.....And maybe receive a new pair of shoes.....or two!
New Webinar: The Credit Year Ahead 2022
Join us on January 13th, 15:00 - 16:30 GMT
We'll be looking at the year ahead in Credit Management.
As always, we’re bringing together economists, senior leaders from the credit industry, and what we encourage to be an opinionated and interactive audience of credit professionals from across the globe. Let’s get to the bottom of the data and what it means for us in the months ahead.
Register to attend this important webinar on the year ahead in credit 2022 taking place 13th January 2022
FIND OUT MORE
Meet Fabio, our international debt maestro.
1. What's your background?
My life has been filled with international experiences.
I've studied Business Economics in Italy, where I am from originally, and at the University of Malaga, Spain.
Before entering the credit profession, I worked in the tourism sector in Dublin, thanks to a European Commission funding program called Leonardo da Vinci. I lived there for two and half years, where I improved my English, business development and sales skills.
Upon my return to Italy, thanks to my language skills and economic knowledge, I entered the credit collection industry whilst working in an International legal office. As my career developed, I once again moved abroad in 2012, following the call of the wonderful multicultural city, London. Here I had the opportunity to further specialise in international debt recovery, and I met Liz Dotter, who is now Legal Director at Baker Ing. I'm thrilled to be working with her again.
2. What is your role at Baker Ing?
I am International Legal Manager. This means I am responsible for the performance management of our Global Legal Network of Partners. I ensure all international pre-legal and legal accounts are run smoothly, cost-effectively, and that our clients are kept fully informed and well-advised at all times.
3. What do you bring to the table?
I think my greatest contribution is going to be over a decade of focused experience in the field of legal action within debt collections. I have deep knowledge in this area, built over time dealing hands-on with debt collection in all scenarios. I understand the challenges that UK and international legal procedures can present to our clients and the concerns they may have, which can stop them from pursuing their rights and successfully collecting what they are owed.
I also would like to ensure my role contributes to Baker Ing's ethos of outstanding client care. I believe my personal capabilities and approach to work will add to our clients' favourable experience when dealing with the company. I hope to ensure that listening, understanding and tactful negotiation is central to our approach in all cases.
4. What made you want to work for Baker Ing?
I have full confidence in Baker Ing as a company because I know the management team are professional, dedicated people. I have observed Baker Ing deliver results and gain a well-warranted reputation within the profession. I wanted to be associated with a leading example of excellence within my profession.
5. What do you like about working in credit?
I enjoy being the point of contact for clients in helping them recover what they are owed!
6. What do you want for Christmas?
A new pair of sunglasses to wear when I ride my bike on the hills…Or perhaps a new pair of basketball shoes?...I’ll leave it to Santa to decide.
New around here? Talk to Gemma.
What is your role at Baker Ing?
I’m heading up new business and will be building a team that will help our new and prospective clients to understand, compare and more easily build business cases for our services.
My team will be focused on helping managers and directors quickly and accurately identify their order-to-cash challenges and how our services might help them achieve their goals.
We’ll be on hand to bring to bear all of Baker Ing’s resources, insight and data on behalf of new and prospective clients in order to help them make key decisions about their order-to-cash processes quicker and more easily.
What’s your background?
I’ve spent the past 15 years in credit management across several different areas. Over time, I came to specialise in working with data at the front end of the process, driving both collections and operational efficiencies.
Although my background is primarily front-end data analysis and efficiency gains, I still have a broad interest in the credit management profession generally and like to keep up to date with developments across the board.
It’s been rewarding to be involved in such a dynamic space which has evolved continually since I entered it, incorporating order-to-cash and, more recently, procure-to-pay…not to mention the huge leaps forward in technology we now leverage.
What do you bring to the table?
I believe I bring a good balance of drive and expertise. My passion, energy, and commitment will be key in driving high-levels of service for our new and prospective clients, as well as further growing the Baker Ing team whilst retaining the company culture.
I am passionate about Baker Ing’s mission to drive innovation within the space and I think I can play a key part in that through our offering new clients a more pleasant and beneficial experience than they might traditionally have experienced when first engaging with receivables management companies.
I have deep knowledge of the order-to-cash process and a talent for seeing past superficial indicators and uncovering real requirements quickly, so I think we can show new clients the best solutions to meet their objectives and do so in an objective, evidence-based way, giving due respect to their commercial and organisational circumstances.
What made you want to work for Baker Ing?
Baker Ing is focused on being the very best there is for high-value and highly-sensitive accounts receivable. This was a hugely attractive proposition – to know exactly what we want to achieve, for which kinds of companies, and how we can be the very best there is in doing so. So many spread themselves too thinly to the detriment of quality, whereas Baker Ing is the opposite – a focused high-quality service that delivers.
Furthermore, I’ve observed that the management team has backed up their ethos with investment in people, technology and data – delivering with huge growth and creating a buzz throughout the profession, both here and internationally.
What do you want for Christmas?
I am going to be asking for a book that I haven’t read, but I would like to; the Snowball Effect by Warren Buffett. I’ll be reading it during my time off in preparation for a great start to 2022!
Connect with Gemma on LinkedIn.
Global Outlook is Live
Information and analysis for credit management.
We're very pleased to announce the launch of our Global Outlook hub where you can browse, search and download a broad range of reporting, market bulletins, webinars, lectures, and factsheets made for credit managers.
The resources include a mix of free and paid-for content. Baker Ing clients receive complementary access to all content.
Just log on and take a look. We hope this will provide a convenient hub for credit professionals to access the data they need to form a global outlook as we adjust to new economic conditions.
bakering.global/global-outlook
Welcome, Markus Kuger - Chief Economist
Welcome Markus Kuger, Chief Economist
We are very happy to welcome Markus Kuger to Baker Ing as Chief Economist. Markus will be contributing to our efforts to provide Credit Managers with relevant, timely information to help inform their credit strategy.
Markus boasts an impressive resume having previously worked with the European Central Bank in the EU Parliament and most recent as Dun & Bradstreet's Chief Economist.
You can download Markus's first Global Outlook report for Baker Ing (Southern Europe Economic Outlook) from the resources section of the website.
Welcome, Markus!
New Team Members!
We're very pleased to welcome two new members of the team this month.
Joseph Eastway joins our admin team as administrative assistant.
An experienced administrator within the property industry and most recently as a case handler for Deloitte. Joseph honed his capabilities assessing investment claims, ensuring FCA regulations were adhered to, and that quality/production targets were hit. Prior to working in financial services, Joseph enjoys his role as an administrator in a target driven environment and prides himself on keeping high rapport with clients and being an excellent all-round communicator.
Aleksey Esakov-Tikhonov joins us as Credit Manager.
A highly-skilled leader in credit management, Aleksey is trilingual, speaking English, Spanish, and Russian. Aleksey is a proven credit professional with a track record of performing in a fast-paced environments, driving results and efficiency. He prides himself on being diligent, dutiful and trustworthy with a strong sense of ethics. above all, we value Aleksey's commitment and dedication to delivering the highest standard of service and professionalism.
Welcome to the team, Joseph and Aleksey!
New Credit Partners
We welcome our new credit partners to the Baker Ing family; Cedar Rose, Crif, and Creditinfo Group.
Our valued credit partners serve the most accurate, timely and detailed global credit data for our clients.
Welcome Tokio Marine HCC
Baker Ing become proud international collection partner of Tokio Marine HCC.
Outstanding service continues uninterrupted as Tokio Marine HCC clients gain access to our international experience, expertise and resources: the perfect match of professional excellence.
Tokio Marine HCC is a leading specialty insurance group with offices in the United States, Mexico, the United Kingdom and continental Europe, transacting business in approximately 180 countries and underwriting more than 100 classes of specialty insurance.
"I am delighted to announce our partnership withBaker Ing. Their experienced credit professionals,advanced use of business insights and vital debtorintelligence is unrivalled. All Tokio Marine HCC clientscan now leverage Baker Ing's focused expertise whilegaining complimentary access to the Global Outlookeconomic reporting service" - Sam Moody, Claims Manager, Tokio Marine HCC
To learn more about Tokio Marine HCC, please visit https://www.tmhcc.com/en/
New Global Outlook Store
Global Outlook: Launching September 2021
A new online hub for credit managers to find relevant information quickly and easily.
Baker Ing's insight and analysis has gained quite a following over the past couple of years. With a rapidly increasing catalogue of content and a packed production schedule upcoming, the time is right to consolidate all of our information for credit managers into one online source - making searching for, and downloading, relevant information quicker and easier.
Credit Managers will be able to access Global Outlook via www.bakering.global from September and search for the content they need by keywords, or browse by category, Global Outlook includes all our content, both free and premium (Baker Ing clients receive free access to all content - please get in touch if you have yet to discuss this with your account manager),
Search, browse, download and leave reviews, We sincerely hope you enjoy using Global Outlook and find it useful.
Look out for Global Outlook on www.bakering.global in the coming weeks.
New Webinar: Western Europe Economic Outlook
Join us on July 15th, 15:00 - 16:30 GMT
We'll be looking at the economic outlook for Western Europe and what it means for Credit Management.
Each instalment of this webinar series focuses on a different region as we bring together economists, senior leaders from the credit industry, and what we encourage to be an opinionated & interactive audience of credit professionals from across the globe. Let’s get to the bottom of the figures and what they mean for us in the months ahead.
Register to attend this event and gain access to the entire Baker Ing resource library.
Or find out more about the event here.
Credit Cruise 2021
We’re bringing together our partners, clients & friends old-and-new for an afternoon of expert speakers, professional insights &networking over fine food and drink. Find out more here.
Polish Institute of Credit Management Partners with Baker Ing
Baker Ing becomes PICM’s international debt collection partner.
Baker Ing joins the Polish Institute of Credit Management as its international debt collection partner. The two will now be working together more closely than ever to deliver insight and experience from the Polish market to an international audience, assisting both Polish and international businesses in optimising their accounts receivable.
“The PICM and Baker Ing have worked together regularly over the past year. This was a natural progression to further deepen our collaborative efforts. Together we bring insight, analysis & international services to Poland, and deliver expertise from within the Polish market to our international client-base. We have already released several reports which the PICM have contributed to. I look forward to producing more great work together.”
Lisa Baker-Reynolds, CEO, Baker Ing International
“Having collaborated on a number of papers and webinars over the past months, I am very happy to welcome Baker Ing as an official partner of the PICM. Our partnership provide valuable support to the organisation and enable us to forge strong international relationships which help our members optimise their credit management for the global economy.”
Robert Dyrcz, PICM, Founder & CEO, Polish Institute of Credit Management
Dun & Bradstreet Collaboration
As part of our response to COVID-19., we have increased our use of real-time, granular data and forensic analysis. We are pleased to add Dun & Bradstreet data to these efforts - the industry's largest global shared payment database. As part of this initiative, we also now offer free international data cleansing and COVID-19 scoring for our clients. To learn more about this service, please message our team here or contact admin@bakering.global
COVID-19 has served to erode the accuracy of traditional risk models and credit data sets, which were developed to account for more predictable financial and geopolitical events. In response, Baker Ing believe we must embrace credit-risk algorithms which leverage real-time payment performance data.
Our collaboration with Dun & Bradstreet's global shared data programme makes this ambition a reality.
Such data-sharing motivates prompt payment and is proven to increase success rates in non-performing debtor segments.
Dun & Bradstreet owns the largest global shared payment database, providing real-time information on payment behaviour and default. Our collaboration ensures our clients' debtors are motivated to settle debts as early as possible and prioritise them over other, less well-connected creditors.
Hosted by Henry
We are excited to announce a new webinar series from Baker Ing, hosted by our very own CRO, Henry James Barrowclough.
Each instalment focuses on a different region as Henry brings together economists, senior leaders from the credit industry, and what he encourages to be an opinionated & interactive audience of credit professionals from across the globe. Let’s get to the bottom of the figures and what they mean for us in the months ahead.
Launching 18th March 2021 when we'll be looking at Eastern Europe and Central Asia.
Register at: www.hostedbyhenry.global
Speakers include:
The Baker Ing Economist Team
Robert Dyrcz, Polish Institute of Credit Management
Jon Swan, Head of Creditor Services, Hachette
Chris Snelson, Sr. Director Int. Credit, VF International
Mike Diette, Int. Credit Director, Harley Davidson International
Adrian Hyde, Partner, Begbies Traynor
Register to subscribe to Hosted by Henry and gain access to the Baker Ing Global Outlook report for this and future webinars.
Introducing debtmatrix...
We are excited to introduce our new collection platform; ‘debtmatrix’.
Two years of collaboration and iterative design, in partnership with international credit directors from around the world, has produced a solution which ensures process integrity and transparency for our clients, as well as delivering integrated live debtor intelligence.
Please get in touch for more information or to receive a demo of the platform.
New Global Insolvency Services
We have started to see a significant increase in insolvencies worldwide and, with that, increased demand for our services in managing these cases for our clients.
Given the somewhat concerning acceleration of such insolvencies, along with their increasing complexity due to larger companies coming under pressure, we are now advising all Baker Ing clients to consider managed global insolvency services.
We are delighted to launch our new Global Insolvency Service which will provide Credit Professionals with much needed support post Covid-19. Collaborating with Insolvency leaders, we ensure our clients' proxy and dividend are best protected. As the anticipated waves of Insolvency start to hit, and internal resource becomes a pressure point, please consider Baker Ing International to support you in your Global Insolvency requirements.
Please click here for more details: Global Insolvency Services or Contact us us for a full proposal.
Meet our new Legal Director
We are very pleased to welcome Liz Dotter to Baker Ing today. Liz joins as our new Legal Director. With over 20 years’ experience in the credit industry, she brings a wealth of knowledge and the highest standards of service to our clients.
Liz began her career in credit straight from university, dealing with consumer litigation claims in the motor finance industry, She then moved into commercial debt recovery as a legal officer, and was promoted to senior management positions where she has managed a variety of global legal services ever since.
Liz Dotter; “I can't wait to take on my new role as Legal Director of Baker Ing Ing. I have lots of initiatives I want to get stuck into to ensure we deliver the very best service. I’m excited to meet all of our clients in the coming weeks – please don't hesitate to get in touch”.
We are working, and indeed living, in unprecedented times. Credit & Collections are more important than ever for international business success. Baker Ing continue our growth and expansion plans – investing in talent who can support our clients and exceed expectations.
You can connect with Liz on LinkedIn here.
Covid-19
Continuity of Service
Baker Ing would like to reassure all our clients and partners of continuity of service at this unprecedented time.
We understand this is an incredibly challenging time for all of you around the world. We are here to support you and your businesses.
We are operating business as usual and are monitoring government guidelines in the UK and around the world. We are thankful that our operational model is designed such that it will be unaffected by remote working practices, which industry-at-large is now having quite suddenly to adapt to.
Our hybrid delivery model allows us to connect our clients with the most appropriate senior credit professionals, in-country, whom we support within a remote operational and technical infrastructure. Further, we have employed a decentralised operational model since Baker Ing’s inception, whereby unnecessary layers of business administration, communication and physical infrastructure is foregone in favour of greater devolved authority to our senior credit professionals on-the-ground, and a more direct and personal relationship with our clients. This thankfully means that not only are our employees used to working remotely but, they thankfully have been able to undertake social distancing measures early and with relative ease – reducing their exposure to transport and office environments.
Advisory Actions
At this time, we anticipate significant global cashflow problems and are advising our clients to move quickly to settle outstanding matters with maximum flexibility and pragmatism. Further, we advise our clients to undertake the following actions:
• Monitoring weekly cash collection versus prior year to see the impact.
• Listing all payments that customers have advised will not be made and determining how this will impact the aging at month end.
• Granting payment holidays in order to spread payments over Apr/May/Jun.
• Advising customers to seek financial support offered by the local country in order to meet its obligations, including our invoices.
• Assessing the impact on workload when this issue is over – plan for engaging temps or outsourcing for an extended number of months.
• Assessing bad debt provisions and making the business aware of the potential impact.
Global Impact
We are truly thankful that we are experiencing, and expect, no disruption to our operational model as a result of the social distancing measures and travel restrictions that are being introduced. Services are, and will, continue as normal. We will be doing everything in our power to support you and your business during this time.
We are working daily with our in-country lawyers across Europe, who are keeping us informed of changes to local legislation that may impact upon the collections and legal processes. We will keep our website updated at regular intervals as more information becomes available. Please register here to receive updates to your inbox: https://bakering.global/resources/register/
For the countries on ‘lockdown’, this will have a significant impact on all arrears, including retail and the court systems. Please note that any court actions currently underway in those countries will have a delay until the courts reopen and the backlog is then cleared.
And Finally
We would like to take this opportunity to thank all of our clients, partners and employees around the world for working with us. We are thinking of you and your loved ones at this time and we wish you all the very best of health. Do not hesitate to contact us if we can help you in any way at all. This is more than just business.
If you have any questions, would like further advice, or more information about how we are handling this crisis to ensure continuity of service, please contact us:
Sarah Ing: sarah@bakering.global
Lisa Baker-Reynolds: lisa@bakering.global
Sincerely,
Sarah Ing, Director
Lisa Baker-Reynolds, Director
Baker Ing International Ltd.
Office 7, 35 Ludgate Hill, London EC4M 7JN, UK
Tel: +44 (0) 0207 871 1790
For the latest information on the pandemic, we recommend:
https://www.who.int/emergencies/diseases/novel-coronavirus-2019/situation-reports
https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19
https://www.acas.org.uk/coronavirus
https://www.gov.uk/business-support-helpline
https://www.gov.uk/foreign-travel-advice
Credit Pulse 2020: Fashion & Luxury Apparel
In association with the AICDP, Baker Ing are proud to be a part of Credit Pulse 2020; the performance-benchmark and peer-review group for senior Credit Professionals dealing with credit-at-scale.
As the leading Debt Collection Agency to the Apparel sector, we are passionate in our support of the sector and as such, have commissioned the Credit Pulse 2020 Fashion & Luxury Apparel Report and Roundtable.
Having worked with this sector for over 20 years, we have seen great changes. This past year especially however, has been particularly tumultuous for many, with the pursuant impacts upon Order to Cash process, Sales and Credit Policies.
This project commences with the launch of the Credit Pulse Benchmark Survey. The purpose of the survey, aimed at global leading fashion brands, is to deliver;
- Aggregated position of growth versus decline and emerging country markets
- Bad debt provision movement and loss against turnover trend
- Order to Cash areas of focus; software, people, process, risk and payments
- Common problems and areas of concern. Stakeholder engagement and ‘Best Practice’ development
Anyone is free to participate but we will however be segmenting the results to reflect the targeted nature of this project aimed at senior Credit Professionals within International Fashion & Luxury Apparel organisations. Confidentiality is, of course, assured.
We hope you will participate in the survey and take an interest in the report. You can access the survey here.
We will also be contacting a select number with invites to the subsequent Roundtable discussion. This will take place amongst a group of no more than 10 of the most seasoned and senior leaders in the sector at a venue in central London in early May. The discussion is to take place under Chatham House rules and presents an opportunity for great minds alike to tackle the outputs from the Credit Pulse report in-depth, amongst peers. Key insights will be shared with permission with all survey participants thereafter. Event page and registration to follow - in the interim, if you would like to be part of the Roundtable, please register your interest by contacting us or the AICDP.
We look forward to hearing your views and experiences. Should you have any queries or questions, please do not hesitate to get in touch.
Collecting in Difficult Territories
This week, Baker Ing's Director, Lisa Baker, takes some time out to share her thoughts on collecting in difficult territories:
Trading in ‘difficult territories’ is a topical subject for senior credit professionals. Competitive business environments mean companies must challenge their appetite for risk by expanding into emerging markets. Preparing your Risk Strategy and Credit Policy for these new and challenging markets requires a robust process, as it often necessitates innovative ways of trading.
Baker Ing International have seen an increase in Latin American cases passed to us for debt collection and mediation. It is a common frustration for clients that, due to currency control, debtors cannot pay invoices as a result of bank restrictions. However, although this is quite possibly true in some genuine cases, very often it is merely used as a convenient excuse.
How do you resolve these issues, and how can you ensure your Credit Policy is strength tested to account for such factors?
We recommend you take the following proactive measures when trading in countries with volatile sovereign risk and restricted currency controls:
- Analyse country risk by obtaining a Country Risk Report from Dun & Bradstreet and ‘deep dive’ into the economic factors that cause country risk.
Understand how your services and products relate directly, if at all, to the country’s problems, e.g. you would be unlikely to accept the risk of setting up a financial services company in Venezuela. However, if you provide vital chemicals to assist in their most significant exports (e.g. Crude Petroleum, Refined Petroleum), then the country factors contribute more positively to your risk assessment.
Dow Jones, Thomson Reuters, Moodys & Fitch are expert information providers to refer to when analysing country risk.
- Understand what Trade Bodies and Professional Associations, both in your vertical and the broader credit industry, have to say about trading in your countries of interest.
Investigate your competitors’ stance and financial position in these regions. The Economist ‘Country Risk Model’ is an interactive tool for analysing state and sovereign risk. It is a great resource for facts and projections to help you assess your company’s situation.
- Strength-test your Credit Risk Algorithm against potential loss, and project best-and-worst case scenarios on bad debt and default segments.
Know precisely the profit and loss on your services, and ensure you put benchmarking exercises in your Credit Policy to test risk vs. reward.
Factor into your Credit Policy the real cost of the risk of trading in challenging countries, e.g. cost of Days Sales Outstanding (DSO), Days Beyond Term (DBT) and Debt Recovery/ Litigation Costs.
- Source the best Credit Reference Agency (CRA) for your country of interest and ensure the CRA is a ‘primary’ data supplier in that country.
The CRA world is quite incestuous in that most buy and sell to one another. The key differentiator is the level of detail and amount of information they provide on companies in each country, e.g., a reseller of a prime data source in the country will often have a Level 2-3 of information available. In contrast, the original data supplier will have a maximum level of maybe 4-5 as the data digitiser and true owner.
Investigate what official financial information you need to file according to local law - www.iaca.org/internationalbusinessreport is a great resource for this.
Ask your tendering CRA’s to confirm, in writing, how they source their data and if they can disclose who their data partners are along with their exact level of coverage.
In difficult territories where financial filing laws are relaxed, it is advisable to have more than one data provider so you can source more support. Fresh investigation reports are often required because financial information is not readily available.
Factor into your client onboarding/sales process the delay you will have in running your risk assessment; ensure all company stakeholders understand the restrictions you have.
In addition to traditional information used in risk assessment, e.g. credit reports, innovation is key in trading with difficult countries. Be prepared to investigate companies via social media and industry trade publications. This information can provide a far more accurate assessment of their ‘live’ credit status than historic filed accounts.
- Protection and preparation for the worst, is vital when trading in difficult territories.
Review and consider all ‘tools of the trade’ in your AR process, especially ones that you wouldn’t require or use in more accessible countries.
Factoring and Invoice Discounting may be an attractive route if you can accommodate the increased cost of sale. Banking may be risk-averse, so not offer this service in countries with high Sovereign Risk. You may find local in-country commercial finance companies that would take the risk however. Refer to local Chambers of Commerce and the International Monetary Fund to find local Financial Institutions (www.imf.org).
- Credit Insurance is an obvious route to explore when you increase your business trading risk. However, you need to ensure you explore all products and services.
Underwriters offer products which protect your revenue. Retractable cover in an unknown territory, and high-risk market for you, would be disastrous! Work with a global broker who has experience in your vertical; they will be best placed to advise you and you can reference their experience and client satisfaction.
There are new and particular underwriters that cater for high risk and difficult territories. Traditional service providers may have high exposure in your country/industry of interest but, another more ‘niche’ underwriter may be open to taking a risk that others will not.
- AR Documents and increased due diligence are required when working in some countries.
It is imperative that your client terms and conditions adhere to local law and that they are not merely a translated version of your UK terms that are drafted according to UK law.
Trying to enforce contracts in local courts that are not consistent with local legislation and terminology is a minefield. Have your contracts drawn up by local lawyers who have proven expertise in legal debt recovery and, preferably, ones who have extensive experience in your industry vertical.
- Letters of Credit are a great tool to use in your Credit Policy.
There are five types of Letter of Credit and you need to ensure two essential elements are present when you utilise them:
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- The bank is approved and part of the International Monetary Fund (imf.org)
- The Letter of Credit suits your business and trading transaction. Ensure you fully understand and monitor your due diligence.
We see China and Latin America as increased Countries of Trading Risk. You can access our Country Risk Reports on some of these Countries, for reference, and Factual information on the Countries’ Legal Systems, on our Resources page
New service: International Terms Review
We are happy to bring a new service to our clients - International Terms Review.
This service is for our clients that trade across borders and need to ensure they have adequate protection in place to ensure quick, simple and cost-effective action should the need arise.
We have introduced this service after a number of cases we've handled on behalf of our clients which have seen the need for international terms review.
Please read more about this service by downloading the brochure here:
CM INTERVIEW
Baker Ing's Director, Lisa Baker, was interviewed recently for 'De Credit Manager Magazine', in The Netherlands. We now republish the interview here for our client's convenience:
‘We see an objection from a prospect as an opportunity’
The market for Global Debt Collection companies is crowded. Few would believe that starting a new organization in this field could be successful. Yet, this is exactly what Lisa Baker and Sarah Ing have done. And successfully so. Off to a flying start, Baker Ing International has significantly exceeded even their own expectations. Credit Manager is talking to Lisa Baker about her passion for Credit Management and what motivates her to start a new venture.
How did you start working in Credit Management?
I had had several positions in the commercial departments of large companies in the Oil and Gas industry when I got the opportunity to join the UK operation of a Global Reference Bureau. The company pioneered the use of the emerging technology of the Internet to supply business information in real time. Originally, the company focused on providing services to smaller and medium sized businesses, but I found that large companies could be interested as well. I got the opportunity to start the Key Account Department. As the name suggests, we marketed to and looked after large clients. I rapidly won new customers and developed a Global Accounts role, travelling internationally and delivering Global data contracts.
In 2013, I moved to an operational position at an International and commercial debt collection specialist. I literally moved from a role at the front of the process to a position at the back. At the reference agency, I had a client facing position responsible for services related to sales to our client’s customers. At the Debt Collection company, I worked with clients to recover debts when things had gone wrong.
Why did you decide to start your own business?
The Credit Agency changed the way of obtaining and distributing credit information. They disrupted the market. Firstly, by breaking down the cost of the service but also by giving the large companies the opportunity to build their own rating methodologies. I worked with many of my customers to move away from the traditional way of retrieval of information on individual companies to getting large amounts of data and to use this material to support their own objectives. As I supported my clients developing their own credit score, I effectively created the demand for our services.
I then started to build common score cards, based on the experience we had gained in customer specific projects. This allowed us to standardize the information we would get from different regions. Info from Eastern Europe, for example, is significantly different from the standards in Western European companies. We needed to have a template to make the different info sets comparable.
There was a massive uptake of the service. Technology became a common topic in my conversations. Companies wanted to automate the credit underwriting process. These organizations automated the credit underwriting process long before Artificial Intelligence was applied in collections.
And then, there was another trend that assisted us. Many large international companies moved from decentralized to centralized operations. And from centralized to captive or outsourced Shared Service Centers in Eastern Europe. Centralization and setting up Shared Services require standardization of processes. As there is now volume and a drive from the top, the new processes can be automated more easily. Hitachi was one of my customers who centralized their Accounts Receivables process to a center in the UK and later moved it on to Krakow in Poland.
My time at the Debt Collection Agency was different. Collection companies all act very much in the same way. Clients, large household brands, have issues with trust when they engage with a DCA. But no one offers anything to alleviate these concerns. The recruitment of the staff working in the DCA’s International call centers is focused on finding the right language skills, at the expense of finding the right experience and aptitude to handle complex collection cases. And then I found that, contrary to what happened at the credit information market, there is no one even trying to disrupt the status quo.
This is where I saw an opportunity. Across Europe, there is availability of know-how and talent as many experienced people have been made redundant due to the trend to set up Shared Service Centers. Large organizations need professionals to protect their brand, they were looking for reliable, efficient, partners. I developed the idea to build a European wide network of experienced credit managers/partners to handle cross border receivables. Each case is handled by a credit manager from the moment it is assigned to us until the resolution and the closing of the file. This approach also provides a solution for the common problem that there is a drop in communication when the case moves from DCA to legal. This idea gestated in 2015 but the company I worked for was acquired by another firm and the project never came off the ground.
Together with Sarah Ing, a colleague, we decided to put our money where our mouth is, as they say, and we started the business. We are thrilled with the results. The market likes the concept. We have set up a Global operation with Credit Manager’s employed across the world. We have significantly exceeded our first-year budget. Are we disruptive? We see ourselves as a DCA boutique with a way of working to go with it. We have this concept of local partners, who we also incentivize once the file has gone legal. We do not rely on automation, but we have introduced intelligent ways of working. As a matter of fact, we do best when prospects raise objections, because we always try to turn them into an opportunity.
You are based in the UK, but you spend a lot of time in The Netherlands. What can we in The Netherlands learn from the UK?
Oh, that is a question I would need to think about more and I will not talk about Brexit. I love The Netherlands and the way the people work. The Dutch are straight speaking, that is great, but they are also indecisive. The Brits are more spontaneous when making decisions. I would recommend that when Dutch people engage in business with British people, they can take advantage of our trait to want to ‘get it done’. You can often get the deal you want by being able to conclude the business quickly!
