19% of fashion retailers displaying signs of financial distress

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fashion

Swathes of fashion retailers across the UK are showing signs of financial distress as they face “some of the most difficult trading conditions since the recession”.

According to new research from accountancy firm Moore Stephens, 6580 clothing stores are displaying telltale signs, representing a massive 19 per cent of the UK’s fashion retailers.

These “early warning signs” include large falls in revenue and poor payment history, forcing retailers to either lower profit margins or raise prices.

According to the report, dwindling consumer spending – which was revealed yesterday to be at its lowest point since 2013 – rising business rates, import costs and wage fees are piling the pressure on bricks-and-mortar retailers.

“Clothing retailers have faced some of the most difficult trading conditions since the recession in the past year,” Moore Stephens’ head of restructuring and insolvency Jeremy Willmont said.

“Fashion retailers have been hit by the perfect storm of rising costs, falling consumer spending and increased competition.

“All three have heaped pressure onto revenue and made profit margins difficult to maintain.

“The increasing popularity of online-only retailers, who have more manageable bills for business rates and lower payroll, means that many fashion retailers will need to improve their ‘bricks and clicks’ offering if they are to thrive.

“Businesses that are able to adapt to changing trends and preferences will put themselves in a much better position to not only avoid insolvency, but to flourish.”

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2 COMMENTS

  1. Iam a manager at a store which is part of a retail fashion chain and I have never seen it quite as bad as this year so far, our daily takings have dropped drammatically and lack of customers is to blame, footfall on the high street is low and the customers that do come through our doors don’t seem to want to spend much money, we have quite a few new spring lines in but it doesn’t seem to make any difference its like they are watching what they spend at the moment and buying non essential clothing is at the bottom of their priorities, I just hope it starts to pick up very soon.

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