Yell Goes into Administration
It’s always sad to see a household name go into administration but such is the fate for Hibu, who went into administration in late November. If Hibu isn’t exactly a household name then you will definitely know Yellow Pages. Hibu is the publisher of Yellow Pages and the company has gone into administration after a long struggle with massive debts of just over £2 billion.
Image source: This Is Money
Hibu re-branded from Yell only a year ago but this has made little difference. The writing has been on the wall for a while now for Yellow Pages, who have found its business model to be sadly lacking. When everybody else was moving into the internet, Yellow Pages was still acquiring overseas directory companies and as a consequence of the demise of directory advertising and the rise of the internet, Yellow Pages have been trying to service huge debts and all this came to a head over the last few weeks.
Hibu – Not Enough Done to Move With the Times!
It’s hard to fathom how Yellow Pages didn’t see the demise of directory advertising coming but nevertheless, its own internet offering has not been strong enough to compete with the likes of Google. The revenues that Yellow Pages make out of the internet have not replaced the revenues that they have lost through the printed directories and so a shift in strategy has been devised. This shift is a move to selling websites to SMEs and then maintaining and running them. This is already a saturated market so it remains to be seen if Hibu can pull this off.
Yellow Pages has always held a degree of affection with the British public and with memorable TV advertising campaigns such as ‘Let your fingers do the walking’, ‘Good old Yellow Pages’ and ‘JR Hartley’, Yellow Pages became a well thought of brand.
The calling in of the administrators is a stark reminder of how quickly the landscape can change.
As ever with administrations one of the main focuses has been in safeguarding jobs, suppliers and current customers. By transferring to a new holding company which is owned by Hibu’s lenders this seems to have been secured for the moment. Hibu’s lenders accepted a debt for equity deal earlier in the year which has angered shareholders whose shares in the company have now been rendered worthless.
An Emergency General Meeting had been called to give shareholders the opportunity to question the directors of Hibu about the decisions that had led to the current state of the company but the calling in of the administrators has caused this meeting to be postponed, angering shareholders further still.
The administration of Hibu has been a complex and problematical affair and for the moment, the 12.000 jobs that are tied up with the company are secure. It remains to be seen if this is still the case going forward.