GRAFTON's decision to place the Atlantic Homecare chain's 13 shops into examinership challenges the concept of a listed company. If profitable companies on the stock exchange are at liberty to place some units into examinership, then there really is no safety in doing business with any publicly quoted company.
Atlantic has been loss-making since the construction mania ended in 2007 and has chalked up losses of €21m but the parent company remains profitable.
Grafton, which makes most of its profit in the UK, was happy to benefit from Atlantic in the good times but seems unhappy to repay the favour in Atlantic's hour of need.
That is a business decision -- but it is not clear why landlords should face the prospect of being stiffed simply because Grafton doesn't feel it can honour contracts that were freely entered into.
Admittedly, almost all of Atlantic's products come from Woodies, which also belongs to Grafton, but landlords will inevitably face losses if the examinership proceeds and succeeds.
The potential benefits for Grafton are obvious: the company could engineer its own downward rent reviews and target five stores that make combined losses of more than €3m. The closures would result in the loss of 38 full time and 76 part time jobs.
The company whined yesterday that remedial actions already taken include the closure of two stores, reductions in operating costs and in staff numbers, new computer systems, along with "substantial investment in revamping, rebranding and extending stores".
It is telling that there is no mention of staff training or improving the range of products on sale.
Stores like Atlantic don't need branding. They need a wide range of well priced products and well trained staff who know where those products are.