Wednesday, September 22, 2021

Retail administrations up 6% in 2012

The number of retailers entering administration was up six per cent year on year in 2012, according to new figures released by business advisory firm Deloitte.

During 2012, 194 retailers fell into administration, a six per cent increase on 2011‘s figure of 183.

This was also an increase on 2010, when 165 retailers entered administration, and Deloitte predicted further problems for the high street in 2013.

Lee Manning, restructuring services partner at Deloitte, commented: “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.”

Blacks, Clinton Cards, Peacocks, La Senza, Game, Comet and JJB Sports were among the 194 retailers falling into administration last year.

In the final quarter of 2012, the number of retail administrations fell to 37, compared to 42 in the same period in 2011.

But the retail sector was one of few recording an increase in companies falling into administration last year, as the total number of administrations fell nine per cent to 1,833 year-on-year.

While administrations increased in the financial services and mining and energy sectors, they fell by 21 per cent in the hospitality and leisure sector, nine per cent in manufacturing and seven per cent in property and construction.

Commenting on how retailers could avoid entering administration in 2013, Mr Manning said: “Strong consumer spending growth is not likely to return any time soon which makes it essential that retailers address the fundamental issues affecting the industry – store portfolios and multichannel.

“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.”


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