The UK’s heavy high street gloom is getting darker as more store closures and potential job cuts continue to paint a problematic picture this year.
Retailers have not suffered this badly since 2013. The negative impact of jumps in inflation, coupled with sluggish wage growth and the rapid rise of e-commerce giants like Amazon, have called into question whether the traditional UK high street can weather the storm.
A downward spiral
Since Toys R Us and Maplin plunged into Administration in February, putting thousands of jobs at risk, it seems as though the worrying trend is set to continue as the UK heads towards Brexit.
Britain’s biggest carpet retailer, Carpetright, has revealed that up to a quarter of its 409 outlets in the UK could close down, due to previous management issues like over-expansion.
B&Q and Moss Bros have reported falling sales figures and grim profits warnings respectively, whilst investors are fretting for the future of other large chains like Mothercare and fashion retailer New Look.
Fashion retail market misery
New Look’s worrying outlook has led to the retailer announcing that up to 60 of its stores will be shut down, and almost 1,000 jobs will be lost.
The company is owned by investment group Brait and has enjoyed rapid global expansion over the last decade, showing a commitment to having physical outlets despite the popular surge in online shopping and rising business rates, particularly in the UK. They have since admitted a significant slump in sales and profits, and earlier in March the retailer launched a Company Voluntary Arrangement (CVA) to help them restructure some of their assets and liabilities.
Even Next, who are considered a market leader in the UK fashion retail industry, have recently announced plummeting profits, attributed to a weak clothing market and their own errors in product ranges.
These big names and others have faced fierce competition from discount stores, such as Primark, who have seen a surge in shoppers. Many consumers are now far more money conscious, largely thanks to real wage growth being outpaced by inflation, as a result of the value of the pound dropping since the UK’s vote to leave the EU.
The latest casualty
Bargain Booze is the latest popular high street name to announce Administration – with owners Conviviality, who are also behind Wine Rack, appointing Administrators.
Conviviality’s Matthew Clark division supplies over 20,000 of Britain’s pubs and restaurants, and this news could see huge short-term supply issues for many of them, whilst putting up to 2,600 jobs at risk.
The company had failed to budget for a £30m tax bill, and are still looking for a buyer for all or part of the business.
You can take back control
At Clarke Bell, we have more than 23 years of experience helping retailers with everything from serious cashflow problems and legal obligations, to dealing with business debts.
Many companies chose to enter a process called a Creditors’ Voluntary Liquidation (CVL) – which can not only be crucial for taking care of insolvency and any business debts correctly and legally, it can give you the fresh start you need to secure the future of your business.
A CVL is not necessarily the best option for everyone.
Our expert Insolvency Practitioners will discuss your situation with you – and give you tailored, free advice to help you find the best solution.
So, please contact Clarke Bell today on 0161 907 4044 or [email protected]