High Street Bankruptcy Claims Up 180pc
There has been a massive increase in the number of retailers which went into administration in the first quarter of 2012, compared with the fourth quarter of 2011, according to a survey.
The latest statistics from the Insolvency Service show that the overall retail figures, which include automotive sales and wholesale, saw an increase of 70% (from 79 appointments in Q4 2011 to 135 in Q1 2012) but retail trade, which covers shops, saw an increase of 180% (24 appointments in Q4 2011 to 67 in Q1 2012).
Richard Fleming, UK Head of Restructuring at KPMG, commented: “Today’s figures are the culmination of a barrage of negative economic pressures thrown at the High Street in the past few years.
“There was a wave of high profile retail administration appointments in the first days of 2012 – not least Peacocks, La Senza and Blacks – and the latest statistics from the Insolvency Service show that the New Year pain extended beyond a small number of well known brands.
“An industry sector by sector analysis shows that administration appointment figures were either flat on the previous quarter or indeed, in the case of the transport and hotel industries, fell considerably. However, the spike in retail insolvencies drove an overall increase in administration appointments of around a fifth.
“Unfortunately we do not think today’s data is evidence of the traditional seasonal increase in retail failures. Our own pipeline of work suggests the High Street and the many companies which service the retail industry are running out of options, with administration – the option of last resort – now inevitable for some.”
Last March, computer games giant GAME went into administration, leaving thousands of high street workers in the verge of losing their jobs. Accordingly, GAME, which has 609 stores and 6,000 staff in the UK, was unable to meet rent and wage payments as it ran out of cash.
Earlier than that, clothing chain Peacocks has gone into administration as well, calling in KPMG administrators.
Administration appointments were up 18% from Q4 2011 (658) to Q1 2012 (779). The overall retail sector (including automotive and wholesale) saw an increase of 70% in administration appointments (79 in Q4 2011 to 135 in Q1 2012). Retail appointments are up around 9% compared with the same period last year (124 in Q1 2011).
The manufacturing sector saw an increase of 34% in administration appointments (76 for Q4 2011 to 102 for Q1 2012) but appointments decreased compared with the same period last year (119 for Q1 2011).
There was a decrease of nearly 50% in administration appointments in the hotel sector (42 for Q1 2012 compared with 62 for Q4 2011). The sector saw around a 20% drop in appointments compared with the same period for last year (52 for Q1 2011).
The transport sector saw a decrease of 24% in administration appointments (25 for Q1 2012 compared with 31 for Q4 2011). The sector saw a decrease of around 26% compared with the same period the year before (34 for Q1 2011).