The Taylor Industries building on Shirley Street.
By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
Taylor Industries’ principals say three years of losses, combined with a harsh economic climate featuring escalating cost and tax hikes, gave them no choice but to close and lay-off 40 staff.
The 74-year-old electrical retailer and contractor, confirming it had closed its doors for good on Monday, revealed that it was insolvent and will be naming a liquidator to wind-up its affairs due to a “significant liability” related to employee terminations.
The company’s statement, explaining the reasons for the closure, represents a case study of the pressures facing many Bahamian-owned businesses in the current low growth/fiscal austerity environment, again highlighting the need for urgent action to tackle the cost and ease of doing business.
Besides blaming a five-year “depressed” economy with annual growth at one percent or less, Taylor Industries said the construction industry - upon which its electrical contracting business relied heavily - had been particularly “severely impacted”.
Meanwhile, the retail side of its business has been squeezed by the shift to online shopping and Florida, at the same time it has been forced to cope with value-added tax’s (VAT) introduction and subsequent hike to 12 percent, plus rising electricity and fuel costs.
Taylor Industries added that cash flow had been “severely depleted” by delinquent and uncollectable debts owed by customers, known as accounts receivables, which were too expensive and time consuming to collect through the court system.
It also cited employee theft as a major problem, together with “inflexible and draconian labour laws that made it financially impossible to appreciably reduce staff numbers in order to downsize”.
In what appears to be a final nail in the coffin, Taylor Industries said Bahamas-based commercial banks had declined to provide restructuring financing despite being provided with what was described as “adequate collateral”.
“The company has been operating at a loss for the last three years, but has continued to have to pay a regressive business licence tax on gross income, further deepening those losses,” Taylor Industries said. “The economy for the last five years has been depressed with growth at one percent or less, the construction industry in particular being severely impacted.”
It also pointed to the “escalating cost of doing business due to increasing government taxation and astronomical electricity and fuel costs. The increase in VAT to 12 percent without a corresponding reduction in Customs duties, and a shift to online shopping has further impacted our retail business”.
Turning to its cash flow woes, Taylor Industries said: “Recovery through litigation with the state of the court system was not a realistic option.
“Theft has been a major contributor to the yearly losses despite every effort being made to minimise or eradicate it. Inflexible and draconian labour laws made it financially impossible to appreciably reduce staff numbers in order to downsize.
“A consequence of the termination of the employees has been the crystallisation of a significant liability that has now rendered the company insolvent. As such, the Company will be appointing a liquidator who will be responsible for winding up the affairs of the company.”
Taylor Industries’ statement did not explain what this liability is, and the company’s principals declined to comment further when contacted by e-mail. It is unclear whether this refers to severance and other monies potentially owed to former employees.
Graham Taylor, Taylor Industries’ sales chief, told Tribune Business in a brief reply: “I can say that it is with deep regret that we had to close our doors to the Bahamian public, and that it was a difficult decision to make. However economic opportunity left us with no choice.”
The company’s statement concluded: “Lastly, [it was] the clearing banks’ refusal, despite their liquidity, to provide financing for restructuring even when provided with suitably valued collateral. The closure of this still family-owned business has unfortunately resulted in 40 staff members, many of long standing, being made redundant.”
However, several sources suggested to Tribune Business that Taylor Industries’ business model had failed to evolve and keep pace with changing market demands and competition, and that its brand had become worn down and tired as a result.
“They didn’t keep up with the times,” the source said. “It’s just sad. The whole thing is sad. What can I say?”
One construction industry source, speaking on condition of anonymity, told Tribune Business that Taylor Industries and all sector players had been hit hard by a combination of VAT and a stagnant housing market that most small contractors rely on for work.
“Taylor Industries surprises me but doesn’t surprise me,” they said. “2014 was up 30 percent over 2013, but VAT kicked in from 2015 and we were down 30 percent at the end of the year. In 2016 we got back to where we were in 2013.
“It’s like somebody flipped on a switch in January 2015. I don’t think anyone in government knows or doesn’t care. We’re all fighting for the crumbs. We’ve had to go looking for new products to sell.”
Taylor Industries, according to its website, was founded in 1945 by cousins Charles and Archie Taylor. Its store was originally located on Bay Street until 1957, when it moved to its current Shirley Street site, and it retained its status as a family-owned company throughout its history.
It sold multiple heavy-duty electrical appliances, including ovens, air conditioners, freezers, dryers and dishwashers from brands such as Maytag, Westinghouse and Lakeshore. Fans and lights were another of its staple product lines.
The company also offered full electrical contractor services, along with shipping, delivery and salary deduction/financing for government employees only.
Tribune Business reported previously that Taylor Industries’ closure is another sign of the shake-out occurring within the Bahamian retail sector and other industries, which has already claimed other well-known, long-standing brands such as City Markets and John S George.
Comments
DDK 5 years, 3 months ago
Such a great shame. Most of us are aware of the strain put on business by changes in technology, the likes of Amazon monsters and the need to keep up with the times. These sorts of things might be manageable, but ARE NOT MANAGEBALE with the successive Majority Rule Governments of the Bahamas, their total lack of understanding of the business world and the unfairness of the policies and practices levied against LEGITIMATE business owners/operators in this Country by said governments and their civil servants who are (LARGELY) interested only in lining their own pockets and are totally devoid of ethics and morality. Anyone who fails to comprehend or empathize with the hardships leading to the closure of Taylor Industries would have to either be in bed with the perpetrators of the terrible system that continues to exist in The Bahamas or be just a tad ignorant.
Godson 5 years, 3 months ago
Though I sympathize with the laid off workers, the trickle effect of this closure is far beyond this redundancy. Consider how tough it is going to be to supplement and find the supplies, parts and trained professional services that this business provided
ohdrap4 5 years, 3 months ago
the persons who fix appliances can reinvent themselves. nowadays you can order the parts online , so they will find work.
people who work in refrigeration are always in demand.
propane66 5 years, 3 months ago
I'm sorry but they continued to operate in the dark ages......closing down for lunch?......they deserve to close just for that
bogart 5 years, 3 months ago
DA GUBBERMINT NEEDS TO GIVE DEM A ....A......A......SUBVENTION...........SOMETING LIKE PAYING OUT THE..... CLICO PEOPLE..........OR PROPPING UP THE PRIVATE SHAREHOLDERS OF DA...BANK.....OR LIKE BUYING OUT THE BUSINESS ......JUS....LIKE BUYING THE HOTEL IN FREEPORT TO SAVE JOBS......BETTER STILL DIS IS BUYING LOCAL..... A BAHAMIAN BUSINESS TO SAVE THE JOBS OF BAHAMIANS........and sell electrical supplies to those same govt workers govt is selling those highly subsidized lots and house deals for Bahamians to obtain their homes........
Well_mudda_take_sic 5 years, 3 months ago
YES, YES, YES. DA MINNIS-LED GUBBERMINT MUST NOW DO FA DEM POOR TAYLORS PEOPLE WHA'S BEST. MINNIS MUSSEE BORROW MORE AN' TAX MORE SO DEM TAYLORS PEOPLE BE RESCUED AN' HE BE WORSHIPPED AS GREAT COMPASSIONATOR SAVIOUR.
John 5 years, 3 months ago
Several other major businesses are just hanging on by a thread and may decide to throw in the towel and close shop at any minute. And while one of the major phones companies is saddled in debt, the other one may be experiencing cash flow problems as customers continue to migrate to the new company. This what happens when a government chooses to increase taxes rather than growing the economy and generating new revenue. The cost of doing business is already through the roof and when taxes are continually being increased on the formal economy, it gives persons operating under the radar a greater advantage. It also increases the amount of losses government incurs in revenue as more and more persons tend to evade taxes. For them it Becca matter of survival.
ohdrap4 5 years, 3 months ago
employers, and family business employers more so, just do not want to pay the employees severance.
i am sure the liquidators will be paid more that what is due to the employees.
a decent employer would pay the employees, may be sella building, then call the liquidators.
TheMadHatter 5 years, 3 months ago
Just a preview (suitable for all audiences) of the upcoming WTO movie. This preview is rated A, but the actual movie Zhivargo them are presently shooting and editing, will be rated R and Freddy Kruger will walk out (unable to watch) after the first 20 minutes.
OMG 5 years, 3 months ago
The same is happening to UK high street shops. The local authorities make travel and parking so difficult and expensive. Why struggle to go into town or Nassau from the out islands when you can compare prices and order from your armchair. Both in the Bahamas and UK the authorities live for the moment but when a business shuts down then rates and taxes are lost.
Well_mudda_take_sic 5 years, 3 months ago
Repost: Can't blame the white Bahamian families who have sold or closed their decades old businesses over the past 20 years or so and migrated their family fortunes and children elsewhere. Successive black Bahamian governments (yes, we blacks!) made it impossible for them to conduct business anymore. Most of them read the tea leaves well. Some have adapted well but still carefully hedge their bets knowing that our country now has a one way ticket to ruination. Why do you think Brent Symonette makes so many trips to Switzerland each year?You can bet his family clearly sees the writing on the wall. LMAO
Gotoutintime 5 years, 3 months ago
Agree with you Mudda---Those that could get out are already gone and the rest are trying their damnedest to get the hell outa Dodge!
Socrates 5 years, 3 months ago
This speaks volumes to the state of the economy. yes consumer purchasing habits have changed over the years and i'm sure most of the other issues mentioned play a part too, but reality is when businesses that have been established for decades like this one, the others mentioned and more, cannot survive any longer, it suggests there are major weaknesses in our economy.
realitycheck242 5 years, 3 months ago
Its going to take inovatives ideas from young mileaneals who have college, university level education to bring their ideas back home and start their own businesses to grow the economy. Banks should be mandated to create a minimum five hundred million venture capitol fund to make loans to young people with good ideas in technology, the green economy, research, eco tourism and light industries production. The status quo is changing in the country and the economic reality's of these times are forcing it to happen. The old saying of "he who has the gold makes the rule"is changing to "he who has the best ideas wins the day" Affected employees should make a positive out of this negative event in their lives by pooling their resources, forming their own company, liaise with old clients with whom they have existing relationships , contact international suppliers and become the local representative for the brands sold and serviced by their former company, Research a great location for their new company that has accessibility, online presence, and provide services to other sectors of the economy so that when there is a dip in one sector, other areas of the business may do well.
Gotoutintime 5 years, 3 months ago
Great ideas but they will never happen with our mentality!
joeblow 5 years, 3 months ago
Sadly, this is just the beginning!
BahamaPundit 5 years, 3 months ago
The elephant in the room is Amazon! What do we do about it? It's just better than any store the Bahamas has to offer. 90% of technology I buy from Amazon. Clothes. Everything. Bahamian buying habits have shifted online to Amazon and Walmart, and nobody has the foggiest clue what to do about it.
The_Oracle 5 years, 3 months ago
A flash back
by The_Oracle
OldFort2012 5 years, 3 months ago
I phoned them up not 3 months ago to have my generator fixed: "Can you come today?" "No, you have to come here, open an account, put down a deposit of $400. Then we will fix an appointment. It will be at least 2 weeks."
"So, I have to drive 15 miles to Downtown? Can I not give you my credit card over the phone?" " No. And we close for lunch now." Put the phone down, found a private guy who was here in an hour. Took PayPal payment.
Good riddance to bad rubbish, Taylor Industries. Get with it or die.
ohdrap4 5 years, 3 months ago
they used to 'close for lunch' and toss customers out at 1pm till 2pm, so they could take their italian siesta.
also, their price did not include installation . washing machine did cost more than 1,000, but to install, extra 150.00. so you talk to their delivery guy who comes back to your house at 7pm and charges 25.00.
there are plenty hungry younger people who will do this for you.
i called an appliance guy the other day who ' only takes wahts app ' calls. I had to ditch him to and find a regular person who takes phone calls.
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