More than 30,000 retailers are in “significant” financial distress during the peak Christmas trading period, according to Begbies Traynor.
The insolvency firm found 8500 of those 30,000 are online retailers, up two per cent from the same period last year and up 49.5 per cent from the start of 2017.
“As we near the end of the crucial festive period, with many retailers pinning their hopes on a final flurry of shopper activity this weekend as more are plunged into significant financial distress, to say 2018 has been a tumultuous year is something of an understatement,” Begbies Traynor partner Julie Palmer said.
“Even online, which has been hailed as the future of the sector, is not immune.”
The figures come just a week after Asos issued a profit warning due to sales throughout November coming in “significantly behind expectations”.
The online fashion retailer said that although trading over September and October was “broadly in line with expectations”, November’s performance was cause for concern.
Despite that, the warning saw £1.3 billion wiped off Asos’ valuation, with shares dropping almost 40 per cent last Monday.
According to Palmer, if retailers are hit by another slow Christmas period, the industry could find itself in deeper trouble than it was at the start of 2018.
At that point the number of fashion retailers in distress grew by 17 per cent, and online retailers by 46 per cent.
With the end of peak trading in site and the long stretch of January and February to face, Palmer said that it was unclear what 2019 could bring for the industry, as retailers continued to cut prices or launch further sales before their financial years end.
“It is not all doom and gloom, and there are learnings from successful retail stories,” Palmer said
“If retailers want to thrive, they will have to bring greater value to their brands.
“They need to get better at anticipating, and responding to, next generation demands and expectations.”