Fewer administrations were seen in the retail sector last year

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Retail administrations ‘down by a third’

The retail sector benefited from a significant drop in company administrations last year, according to Deloitte.

Friday 9 January 2015

The number of English retailers entering administration fell by more than a third between 2013 and last year, new data from Deloitte has revealed.

The business advisory firm said the total dipped by 35% between the two years, from 183 in 2013 to 119 last year.

In a further positive sign, the research indicates that close to a third of the administrator appointments last year were recorded between January and March. A total of 39 were seen over these three months.

Consumer confidence ‘grows’

Lee Manning, restructuring services partner at Deloitte, said improving trading conditions boosted retailers in 2014, following a few turbulent years.

He added: “As the economic situation improved, consumer confidence increased and the retail industry benefited.

“Although the overall trend for the sector is positive, there will always be individual retail insolvency cases, as with the clothing chain Bank Fashion this week.”

Wider improvements

Looking at the wider economy, Deloitte’s researchers found that the number of administrations dropped by a fifth across all major industries last year.

They said that across the sectors which they analyse, some 1,302 firms have entered administration proceedings over the past 12 months.

The financial services and IT sectors were the only two industries to endure rising administration totals over the year.

While the financial services industry saw an increase of 2.5%, the figure reached plus-14% in the IT sphere.

Regional data from Deloitte shows that London witnessed the largest number of administrations over 2014, with 328 appointments recorded in the English capital city.

The North West also endured a sizeable number of appointments, with the total reaching 280.

Alternative restructuring tools

Mr Manning said that along with the retail sector, the hospitality and leisure industry performed better in 2014, witnessing 34% fewer administrations.

The expert said that rather than typically opting for administration proceedings, businesses may increasingly look to use other restructuring tools in the future.

He concluded that there may soon be a greater emphasis on “constructive debtor-driven solutions involving negotiations with creditors, either informally or through the use of CVAs, where in both circumstances companies will work alongside restructuring professionals”.

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Copyright Press Association 2015

“As the economic situation improved, consumer confidence increased and the retail industry benefited.” Lee Manning, Restructuring Services Partner at Deloitte

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