Saturday, 6 June 2020

Chanel among foreign firms getting UK government-backed loans

Discontent is brewing in the UK media over a number of apparently well-capitalized international companies that have been able to access government-backed UK loans. 

Part of the package announced by the British government to see the economy through the coronavirus crisis, some of the loans have been huge, with the biggest seeing German chemicals company BASF borrowing £1 billion, despite having fewer than 1,000 employees in the UK.

Fashion leader Chanel is also on the list of companies that have accessed the money with the company reportedly getting a £600 million loan. The firm’s owners Alain and GĂ©rard Wertheimer are reported to have a fortune estimated at around £30 billion. However, the company said the loan will be repaid relatively quickly.

Access to state aid by wealthy individuals and companies has been a hot topic in the UK since the lockdown began and saw multimillionaire Victoria Beckham applying for and then stepping back from furlough money for her UK shop staff after a deluge of criticism in the press and on TV. Chanel, however, hasn’t made use of the furlough scheme.

The COVID Corporate Financing Facility is open to large companies that have a “significant UK workforce” and "make a material contribution to the UK economy”.

Chanel has only a small chain of boutiques in London, as well as concessions in Selfridges and Harrods. But its products are sold much more widely with the firm’s sunglasses and beauty ranges, in particular, being available all over the country in a very large number of stores. It also has a large corporate presence in Britain.

A Chanel spokesman told The Daily Mail: “Chanel's global headquarters are in the UK and we have 1,600 people working in our London base and UK operations. We have chosen not to access government furlough schemes, but as a large employer which has seen all of its boutiques shut by the Covid-19 pandemic, we have accessed the Bank of England facility. The loan will be repaid within the next 12 months.”

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