Retail insolvencies up 6% in 2012
The number of retailers falling into administration in 2012 was up 6% on 2011 although there was a slight fall in the last three months of the year compared to the fourth quarter of 2011.
Figures released by business advisory firm Deloitte show that 194 retailers entered administration in 2012, compared with 183 in 2011 and 165 in 2010. However, in the last quarter of the year there were 37 insolvencies compared to 42 in 2011.
Lee Manning, restructuring services partner at Deloitte, said: “These figures are a stark reminder of the difficulties which continue to face the high street.
“Constrained household budgets and the structural challenges facing the sector mean it is certain that we will see further distress next year. Christmas trading appears to have been reasonable, though not spectacular and not enough to prevent insolvencies in the first quarter of 2013.”
Never Miss a Retail Update!The past year has seen a number of high profile, nationwide chains among the casualties including Peacocks, La Senza, Blacks, Game, Clinton Cards, JJB Sports and Comet, resulting in thousands of jobs lost in the retail industry.
Deloitte warns that the continuing fragile consumer confidence means that retailers need to address the fundamental issues affecting the industry – store portfolios and multi-channel.
Manning added: “There will always be a need for physical retail space but at present, too many retailers have too many stores and 2013 is likely to be marked by further closure programmes, both within and outside of formal insolvency processes.
“Similarly, as an increasing proportion of retail sales move to online and mobile, retailers need to consider how their stores support sales across all channels by offering flexible delivery or collection options, becoming a product showroom and developing brand engagement and loyalty.”
The analysis shows that a total of 1,833 businesses went into administration in 2012, compared with 2,010 last year, a fall of 9%. There were 21% fewer administrations in the hospitality and leisure sector, 9% less in manufacturing and 7% less in property and construction.
