The number of retail insolvencies in the UK has grown by 6 per cent over figures from 2011, new research shows.
A total of 194 retailers entered administration during 2012, up from 183 in 2011 and 165 in 2010, business advisory firm Deloitte says.
However, Up-to-date figures from Deloitte also reveal a 9 per cent fall in total administrations, with 1,833 companies entering the process.
Lee Manning, restructuring partner at Deloitte, describes the retail figures as a ‘stark reminder’ of the difficulties the high street faces.
He adds, ‘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.’
Brands including Peacocks, La Senza, Blacks, GAME, Clinton Cards and JJB Sports were among the high-profile casualties of 2012, with electronics firm Comet the most recent administration case.
Further statistics from Deloitte shows that, despite ‘almost all sectors’ posting a decline in the number of business failures during 2012, retail was still hit hard.
Retail insolvency stories from 2012:
- Jobs saved at Game
- Christmas bringing little joy to ‘zombie’ retailers at risk of insolvency
- Retail administrations protecting more jobs than stores
- UK retailers closing 20 stores a day
During 2012 there were 21 per cent fewer administrations in the hospitality and leisure sector (171 vs. 216), 9 per cent in manufacturing (284 vs. 311) and 7 per cent in property and construction (426 vs. 457).
Away from retail, only financial services and the mining & energy sectors saw notable increases (47 vs. 30 and 28 vs. 22 respectively).
Manning says, ‘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.’