Begbies Traynor, a business recovery firm, estimates that 140 UK retailers are currently in “critical condition”.
The news comes shortly after Blockbuster joined HMV on the administration list. Begbies Traynor wouldn’t reveal any of those in trouble, but it’s suggested a number of high-street brands are being outlined as “critical”.
“Experiences teaches us that a high proportion [on the critical list] will fall into some sort of insolvency proceedings,” Begbies Traynor partner Julie Palmer told The Guardian.
“Overall, the sectors that are most vulnerable include those affected by shoppers moving to online or digital formats, such as specialists in music, games, books, news and stationery along with the specialists that are most affected by the convenience and price-driven offering of the supermarkets, which includes chemists, health and beauty, and alcohol retailers.”
Numbers from RSM Tenon suggest 1,300 retailers filed for insolvency during 2012; a number that is going to get worse across the next year. Chris Ratten, the firm’s head of restructuring, said: “We expect this year to be worse, as those who have managed to teeter on the edge for the past few years will feel the full effects of the reduction of discretionary spending, fierce competition and reducing cash reserves.
“We believe 12,679 retailers have a high risk of insolvency out of more than 100,000 retailers nationally.”
Thanks to MCV for the heads up.