The number of retailers that fell into administration during 2010 was significantly down on the previous 12 months, according to a new report by the Centre for Retail Research.
Whereas 54 and 37 companies failed in 2008 and 2009 respectively, just 26 firms experienced similar difficulty last year.
Centre for Retail Research (CRR) suggests that 944 stores and 10,930 employees were affected by businesses failing, which although inevitably stressful for those involved compares favourably with the previous two years.
Of course, administration does not necessarily mean the end for a retailer and some of the companies which encountered difficulties during the year may find they are just experiencing temporary financial problems.
Among the companies that went into administration in 2010 were Faith Shoes, whose £14 million of debt is now under the control of retail restructuring experts Hilco, and fashionwear chain Envy!, which is likely to continue operating in a reduced format.
More recently, G A Europe announced that formal menswear retailer Suits You will be closed down, while greengrocer Stokes entered voluntary administration in October prompting a number of store closures.
A survey published by CRR and online shopping comparison site Kelkoo this week indicated that tough times are ahead for the UK retail industry.
The study predicts that consumer spending will drop by 0.5 per cent year-on-year during the first quarter of 2011, with today’s VAT increase to 20 per cent set to cost each UK household an average of £520.
Commenting on the smaller number of administrations in 2010, Director of the CRR Professor Joshua Bamfield told Retail Gazette: “It has been difficult to find companies that are going bust this year, which is quite good news.
“The retailers that have survived the tough 2008-09 period are credible businesses and are now being careful.”
In the 12 months ahead, though, he expects around 10,000 shops to close as retailers reduce the size of their portfolios in light of further economic pressures.
Bamfield remarked: “Independents and multiples will close stores, with some of the larger businesses reducing their network of stores by 10-15 per cent, partly because of the growth of online retail and partly due to consumer spending reducing.”