Retail insolvencies down 30% in the first half of 2013
The research by business advisory firm Deloitte shows that the outlook is showing signs of brightening as the number of administrations across all sectors also fell in the period, from 1035 in 2012 to 816 this year.
Of the high profile retail casualties during the first half of 2012, around 2,300 stores were affected. By comparison, in the first six months of 2013, this figure almost halved to around 1,400 stores. Similarly, the number of staff employed by insolvent retailers was in the region of 28,000 in the first half of 2012, compared to around 15,000 in 2013.
Lee Manning, restructuring partner at Deloitte, explained: “We have seen a number of high profile retail administrations this year including hmv, Jessops, Blockbuster, Republic, ModelZone and Dreams. However, these latest figures show that the overall picture is improving.
“Whilst the economy remains relatively flat, the retail sector has seen the weaker players fall by the wayside and as a result others are now stronger and more robust.
“Regional prospects are also improving as the number of retail administrations fell in every part of the UK. The sector has suffered significant pain in the past couple of years but we should take some confidence from today’s results. Retailers are better equipped to succeed in today’s tough market and we are beginning to see the sector turn a corner.”
The research also shows that overall, the second quarter of 2013 saw a decline in administrations of 17% on the previous quarter, with a total of 369 companies compared to 447 in the first quarter 2013.
In addition, the wholesale and distribution sector saw a 25% fall in administrations in the first half of 2013, compared with the same period in 2012, suggesting the squeeze on suppliers is starting to ease.
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