// New data shows that retail insolvencies have hit a five-year high
// There were 1252 insolvencies in the industry in the last year
// This compares to 1232 the year before
There has been no let-up in the number of retail businesses entering insolvency, with new figures published today showing it has reached a five-year high.
According to data from Insolvency Service statistics, there were 1252 insolvencies in the retail industry in the last year, compared to 1232 the year before.
Insolvencies in the sector have not only hit a five-year high, they are also 31 per cent higher than the 958 insolvencies recorded in the year before the 2016 Brexit referendum.
Compared to five years ago, retail insolvencies have risen by 16 per cent.
- “Desperate” quarter sees UK retail health drop below historic lows
- 85,000 retail jobs axed in the past year
- 2870 stores shut down in first half of 2019
Bonmarche went insolvent in October, while high-profile names such as Links of London and Karen Millen did so earlier this year.
“There hasn’t been any let up of pressure on retailers in the last year,” said Tim Moynihan, a senior associate at law firm RPC, said.
He said one of the reasons behind the increase is because funding from lenders or private equity backers was becoming “extremely hard” to achieve, especially for smaller retailers.
He added that this was a “problem” because retailers need to increase their investment to ensure they can capitalise on and survive the growing trend of consumers shifting towards online retail.
“Retailers have also now had six months since the 5% rise in the minimum wage – costs that have to be borne by shops themselves as they have a low chance of passing that cost onto customers,” Moynihan said.
“Hopefully there is some good news on the horizon as we get towards a Brexit deal.
“That said, there are difficulties for the retailers across Europe – for example, Vodafone is planning on closing around 1000 of its European stores.”