Familiar high street brand under threat as firm makes shock admission it may go out of business
A WELL-KNOWN high street brand has warned its future is in doubt after recording massive losses.
Embattled office-sharing firm WeWork told US regulators in a filing yesterday it is worried about its survival.
The company said it was struggling due to financial losses, cash needs and a drop in memberships.
It said “substantial doubt exists about the company’s ability to continue as a going concern”.
It added its fate rests on the “successful execution of management’s plan to improve the company’s liquidity and profitability” over the next 12 months.
The New York-based company operates over 800 locations in more than 35 countries globally.
Despite yesterday’s announcement, a WeWork spokesperson said there would be no immediate impact to UK operations.
WeWork’s interim CEO David Tolley added: “We are confident in our ability to meet the evolving workplace needs of businesses of all sizes across sectors and geographies, and our long term company vision remains unchanged.
He continued: “The company’s transformation continues at pace, with a laser focus on member retention and growth, doubling down on our real estate portfolio optimisation efforts, and maintaining a disciplined approach to reducing operating costs.”
It comes after WeWork lost millions of pounds during the first six months of 2023 as demand for its shared office spaces weakened, it told regulators.
The company has also been struggling since its founder Adam Neumann left the business in late 2019 and it filed its IPO paperwork in August 2021.
Its valuation fell from £36.92billion to less than £7.85billion following the filing and investor interest dropped.
The company was also hit hard by the coronavirus pandemic, as hoards of workers stayed at home.
It comes after a number of retailers struggle to keep shops open as shoppers turn their attentions to online shopping.
The trend was exacerbated by the pandemic as consumers stayed at home.
That, combined with higher energy and wage costs for companies, has led to a number of stores closing for good.
Boots is closing hundreds of stores over the next year, reducing its portfolio from 2,200 to 1,900.
Meanwhile, Clarks and Iceland are pulling down shutters on a number of stores, including some this week.
Plus, bargain retailer Poundland is closing stores in August and September.
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