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Retail sector ‘turning a corner’ - new figures announced

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The number of retailers falling into administration in the first half of 2013 fell by 30% to 87, compared with 124 in the same period last year, according to research by Deloitte, the business advisory firm.

Quarter-on-quarter retail administrations also fell by nearly 15% compared to the first quarter (Q1) 2013, from 47 retailers to 40 and the second quarter (Q2) saw a decline in administrations of 17% on the previous quarter, with a total 369 companies compared to 447 in Q1 2013.

Within the retail sector, the story behind the figures is particularly intriguing. Of the high profile casualties during the first half (H1) 2012, around 2,300 stores were affected. By comparison, in the first six months of 2013, this has almost halved to around 1,400 stores. Similarly, the number of staff employed by insolvent retailers was in the region of 28,000 in the first half of 2012, compared to around 15,000 in 2013.

Lee Manning, restructuring partner at Deloitte, said: “We have seen a number of high profile retail administrations this year including hmv, Jessops, Blockbuster, Republic, ModelZone and Dreams. However, these latest figures show that the overall picture is improving.

“Whilst the economy remains relatively flat, the retail sector has seen the weaker players fall by the wayside and as a result others are now stronger and more robust.

“Regional prospects are also improving as the number of retail administrations fell in every part of the UK. The sector has suffered significant pain in the past couple of years but we should take some confidence from today’s results. Retailers are better equipped to succeed in today’s tough market and we are beginning to see the sector turn a corner.”

Published on Monday 01 July by Editorial Assistant

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