New data released from the Insolvency Service statistics has revealed that retail sector insolvencies have reached their highest numbers in 5 years. The data highlights how in the last year alone, 1,252 businesses have entered insolvency in the sector, which is a 16% rise when compared to the year before.
The difference is even steeper when compared to the year before the 2016 Brexit referendum, as the insolvency numbers have climbed by 31% since then. Earlier this year, more big retail names became insolvent, including Links of London and Karen Millen. In October, Bonmarche became another victim of the struggling high street. As the women’s fashion chain went into administration, leaving uncertainty for the company’s future and 2,887 jobs at risk.
It seems the retail industry pressures aren’t going to let up anytime soon, as many are blaming the insolvency increases on how hard it’s become for smaller retailers to achieve funding from lenders or private equity backers. Many retailers need to secure funding in order to continue operating as consumers shift more and more towards online retail.
Retailers all across the UK are still struggling to overcome the current economic climate, especially as many are overwhelmed with debt and cash flow issues. For some retailers, one option that could offer relief and resolve financial issues, could be the Pre-Pack Administration process.
By opting for a Pre-Pack Administration, not only can your business operations continue as normal, you’ll also avoid the negative publicity often associated with company insolvency. If you’re looking to protect your company’s brand and reputation, this process can help you by saving jobs, improving cash flow and keeping options open for the future.
Plus, the process is fast and can generally be more affordable than other options available to liquidate your business.
If your retail business is struggling with mounting debts and you’re seeking a way to delay or reduce payments, then you could benefit from a Company Voluntary Arrangement (CVA).
A CVA can still be beneficial for you even if you’re already in the process of liquidation, or you’re looking for an exit route from an administration. It can allow you to easily regain control, take care of business debts, and secure the future of your company.
Another incredibly effective option is to go through a Creditors’ Voluntary Liquidation (CVL), where your company is formally liquidated, with all of the directors’ legal obligations being fulfilled in accordance with all relevant legislation. A CVL can give you the opportunity you need to free yourself from a bad financial situation, protect the interests of creditors and limit your own personal liabilities.
With Clarke Bell, a Creditors’ Voluntary Liquidation is from just £2,995 (all inclusive).
Don’t wait any longer, get professional help now – and get in touch with our team.