Increase in retail administrations
12 Jan 2018
2017 saw 118 retailers going into administration, a 28 per cent increase on the 92 that filed for insolvency in the previous year.
Recent analysis shows that the number of retailers entering administration rose in 2017 for the first time in five years.
Furniture businesses Feather & Black and Multiyork both collapsed at the end of November, taking the number of retailers entering administration to 118 in 2017, a 28 per cent increase on 2016. 26 per cent of the insolvencies occurred in London, followed by the North West (22 per cent) and the South East (20 per cent).
The research also shows that administrations with companies with more than ten stores rose by 55 per cent from 11 in 2016 to 17 in 2017.
A spokesperson for the report comments: "We see insolvencies in higher value categories, such as furniture, as a leading indicator that falling consumer confidence, and a fall in consumer spending, is starting to bite.”
“This has implications for retail sub-sectors with a lower price point which typically take longer to feel the impact of reduced consumer spending.”
He went on to add that pressures on the sector are set to continue into 2018, with the more successful businesses being the ones which have “already proactively addressed the cost challenges alongside focused pricing and sourcing strategies to maximise margins”.
“We also expect online retailers to continue to thrive, driven by two factors, their clear cost advantage against traditional physical retailers and the continued use of sophisticated data analytics to target consumers directly.”
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