Published on 10 - April - 2012
Retail administrations surge by 15% in Q1 2012According to Deloitte, 69 retailers fell into administration during the first quarter of 2012 compared with 60 in the same period last year, with an estimated 10,000 job losses.
Deloitte said some retailers may have to reduce their property portfolios by 40% by 2017
According to Deloitte, 69 retailers fell into administration during the first quarter of 2012 compared with 60 in the same period last year, with an estimated 10,000 job losses.
The business advisory firm highlighted an increase of 64% on the previous quarter, when 42 retailers entered administration. The quarterly rent day was pinpointed as a factor in the insolvencies rise, as well as retailers having "too many marginal stores."
Deloitte's restructuring services partner Lee Manning said: "As online retailing continues to grow whilst overall spending is weak, the fixed costs and poor performance of some stores drags on the overall business.
"The first quarter of 2012 is particularly significant given the high profile nature of the companies we have seen enter administration: Peacocks, Game, La Senza, Blacks and Past Times. The number of job losses that came as a result of these administrations was almost 10,000 out of the 22,000 employed by those companies.
"In contrast, Q1 2011 saw far lower levels of job losses. Overall, for 2011 and the first quarter of 2012 the largest 15 retail insolvencies had 2,800 stores and only 1,350 stores have survived; an attrition rate of 52%."
It was a more optimistic picture for business overall, however, with Deloitte's findings revealing a 10% decline of British companies - excluding retailers - falling into administration in Q1 2012 compared with Q1 2011.
Mr Manning added: "Whilst conditions undoubtedly remain tough, the year-on-year decline is a positive indicator and gives a glimmer of hope that some industries are potentially over the worst."
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