Recent research shows that the number of retail insolvencies in the first quarter of 2011 increased by a staggering 30% from the same time last year. Financial services firm Deloitte says that there were 60 retail insolvencies in the UK during Q1
compared to 46 for the same period in 2010, which is the highest quarterly number for two years.
Lee Manning, reorganisation services partner at Deloitte, commented: “It comes as no surprise that the retail sector has been worst affected. The sector is heavily reliant on buoyant consumer spending and the increase in VAT and the Government’s austerity measures are undoubtedly hitting the sector hard. In particular, smaller retailers are likely to be feeling the pinch more so than ever, as they often have little grounds to negotiate flexible credit terms with suppliers and may find it difficult to raise funding.”
FashionUnited has brought you stories over the last few months of the drastic measures retailers have been taking – JJB Sports is just one example with a completed secondary voluntary agreement and numerous strategic reviews being implemented.
Across all sectors, corporate administration increased by 22% in England & Wales during the last quarter compared to Q4 in 2010 with most sectors seeing a rise in insolvencies.