KPMG has announced the launch of its brand new 'Retail Distress Tracker', which analyses UK companies facing stress at the moment - and found home and home improvement retailers are under the most pressure at the moment.


The tracker takes into account factors such as cashflow, potential covenant breach and refinancing.
KPMG restructuring partner Chris Laverty said, "Retailers selling products for the home are having a great deal of difficulty selling to plan in the current economic environment. With unemployment rising sharply, consumers are reducing their non-essential outgoings drastically. Retailers that sell items for the home or home improvement make up nearly 35% 0of our tracked companies. While the UK was gripped by home improvement fever only a year ago, consumers are now turning their backs on furniture and other large ticket items.

"Some DIY companies may benefit from consumers looking to improve rather than move but the business model requires the sale of high volumes of stock to achieve profitability. This is a conundrum with no obvious short-term solution."

Mr Laverty continued, "Compared with other private-equity-backed business sectors, retail as whole does not have a vast amount of debt on the books. However, those companies with even a small amount of gearing, particularly in homeware or clothing, will really be feeling the pressure of waning consumer spend."