Going bust or getting sold?

It appears that they’ve got the trainees in at the Telegraph. Or perhaps the arts graduates have bled over into the business pages – a tragedy really, as that’s where logic and numeracy are at a premium. For we’re told that a business not going bust but instead being sold is a warning that it might go bust.

Erm, what?

Thousands of British high street jobs may be under threat now that Poundworld’s US owner has ditched a rescue plan to bring the loss making discount chain back from the brink, opting to sell up instead.

American private equity backer TPG is said to have instructed Deloitte to find a buyer for Poundworld, which employs around 5,500 staff across the UK, by April.

OK, so they’re not going to try to restructure it themselves, but to try to sell it. Why might that be?

TPG decided to put the company up for sale after receiving interest from prospective buyers, a source told Sky News, which first reported on the sale.

Other people are willing to put up good money to buy the whole shebang.

OK, but then what’s this?

But the decision to seek a buyer for the entire business could spell the end for the rescue plan.

Failure to strike a deal within weaks may lead to the discount chain facing administration.

That other people are willing to put up the cash to buy the whole shebang is evidence that it’s about to collapse into total bankruptcy?

Sigh, if business reporting is going to be like this then what hope is there that the rest of us are going to gain an accurate enough grasp of reality?

By the way, yes, the education was at Islington Technical College.

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6 COMMENTS

  1. “Thousands of…jobs may be under threat” — It’s missing only Tim’s frequent reminder that jobs are a cost and not a benefit of business. New owners may indeed discard the old owners’ recovery plans, and employees they cannot make productive. (Productive means producing revenue, not producing filled-in forms.) In view of trends in the world, new owners might pull Poundworld out of retailing entirely and put productive assets to new uses. Now we are supposed to lament the passing of the previous “rescue plan”?

  2. “Sigh, if business reporting is going to be like this then what hope is there that the rest of us are going to gain an accurate enough grasp of reality?”

    Who out there is reading the likes of the Telegraph for serious business news still, or frankly, serious news about anything. Or nearly any of the papers?

    All of the papers, including the FT, are writing for similar levels to Daily Mail readers. They’re writing for the casual reader wanting to be shocked and angry at the state of the world, not illumination. You want serious stuff, you go to the blogs, Twitter or Medium.

  3. Media carries with it a credibility that is totally undeserved. You have all experienced this, in what I call the Murray Gell-Mann Amnesia effect. (I call it by this name because I once discussed it with Murray Gell-Mann, and by dropping a famous name I imply greater importance to myself, and to the effect, than it would otherwise have.)
    Briefly stated, the Gell-Mann Amnesia effect works as follows. You open the newspaper to an article on some subject you know well. In Murray’s case, physics. In mine, show business. You read the article and see the journalist has absolutely no understanding of either the facts or the issues. Often, the article is so wrong it actually presents the story backward – reversing cause and effect. I call these the “wet streets cause rain” stories. Paper’s full of them.
    In any case, you read with exasperation or amusement the multiple errors in a story – and then turn the page to national or international affairs, and read with renewed interest as if the rest of the newspaper was somehow more accurate about far-off Palestine than it was about the story you just read. You turn the page, and forget what you know.
    That is the Gell-Mann Amnesia effect. I’d point out it does not operate in other arenas of life. In ordinary life, if somebody consistently exaggerates or lies to you, you soon discount everything they say. In court, there is the legal doctrine of falsus in uno, falsus in omnibus, which means untruthful in one part, untruthful in all.
    But when it comes to the media, we believe against evidence that it is probably worth our time to read other parts of the paper. When, in fact, it almost certainly isn’t. The only possible explanation for our behavior is amnesia.

    Michael Crichton’s 2002 essay “Why Speculate?”

  4. Quentin Vole,

    I know. But at least at one time, something like the FT was at least trying to be serious.

    The problem I think is that business information became much more specialised than just reading a newspaper. You can get reports on something rather specific like trends in mobile phone usage to a lot of granularity written by specialists in that market. It might cost you £300 for the report, but that’s probably worth it for how much it will improve your decisions.

    And I think a lot of journalists who knew a bit went to work for those sorts of companies.