New research has found that the number of retail and consumer firms that fell into administration in the 12 months to November was 30 per cent lower than the same period in 2018, despite increasing high street turmoil.
The report said that although fewer retailers collapsed outright, the retail landscape is “just as perilous”, as more firms have used restructuring methods to avoid insolvency.
The use of Company Voluntary Arrangements (CVAs) where retailers renegotiate terms with their landlords, increase significantly over the year, as the burden of rents and rates remains high.
While a large numbers of retailers announced major store closures, there was a reduction in the number of businesses having to close their entire store portfolio and fold.
The research found that there were 81 retail administrations in the 11 months to November, down from 116 a year earlier. Meanwhile, the fast moving consumer goods (FMCG) sector, which covers food and drink brands, saw 35 administrations in the period to November, a 30 per cent decline from 50 in 2018.
December is a key month for retailers, so poor figures could lead to administrations by the end of the year and in January, particularly if the double digit sales declines of Christmas 2018 are replicated this year.
As one commentator remarked, the pressure on bricks and mortar retailers has increased this year, with some very famous high street names collapsing and while the scale of administrations is likely to be less in 2020, there could still be a “steady stream” of them next year.
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