DIYWEEK.net

New research from the Local Data Company and professional services firm PwC has shown chain stores have been closing at a rate of 20 per day on average during the first half of 2012, and significantly faster during the eventful summer months.
Amounting to a net reduction of 953 stores, it's a vast acceleration on 2011's total number of 174 closures. The summer months were blamed for the slump, with July and August seeing the closure numbers increase to 32 per day. PwC blamed the "result of recent administrations and drawdowns" for this low point.

Across multiple retailers in 500 town centres, home, furnishing and furniture stores were among the worst sufferers with 54 closures, along with gift (down 82) clothes (down 276) and toy shops (-103) while discount stores (up 50) and coffee shops bucked the trend.

PwC insolvency partner and retail specialist Mike Jervis said: "All retailers in distress have too many locations. The insolvencies of Game, Peacocks and Clintons demonstrated this in spades.

"Relatively long leases, with inflexible terms, have been entered into in a growth phase of the economy which is no longer appropriate.

"Where over-expansion has already taken place, retailers need to face that reality and formulate a strategic plan in partnership with landlords, not in confrontation with them.

"There are sophisticated tools to analyse the extent to which sales from closed stores migrate to a retailer's other locations. Properly managed, a large part of the lost sales can be regained.

"Retail is increasingly becoming a partnership between the store group, its suppliers and the owners of its locations. Like any partnership which falls on hard times, dialogue involving all partners is key."