The number of retail administrations has increased for the second year in a row. This comes after 125 retailers collapsed last year.
Last year, the administrations increased by six percent from the recorded 118 in 2017, and 26 of the retailers that collapsed were considered as large brands, as compared to the 17 that were noted the year before.
According to a research that was conducted by Deloitte, there was a rise of 53 percent in retail CVAs last year and a seven-fold increase in the number of large retailers that opted for CVAs as a restructuring method.
HMV, a high street music store, announced that it had entered administration for the second time since 2013 at the end of 2018, and Coast, Poundworld, and Toys ‘R’ Us were among the other retailers that collapsed during the year.
Dan Butters, a partner and the head of Restructuring Services at Deloitte, stated: “Notwithstanding the increase in overall retail insolvencies, we have seen a significant increase in large retail insolvencies and CVAs in the last 12 months. 2018 saw some high profile retail casualties and a continued deterioration in trading conditions for retailers in the final quarter of the year.”
He added: “Consumer confidence fell in the third quarter of 2018, which, combined with inflation-driven pressure on disposable incomes, has contributed to twelve consecutive months of declining footfall.”
He continued: “The rapid decline in the performance of the high street has driven bricks and mortar retailers to increase their levels of discounting to counter this.”
Butters concluded: “This comes as retailers continued to face increasing staff and property costs, and a weaker Sterling. Online retailers, however, have fared better, accounting for a record 21.5% of all UK retail sales in November.”
However, despite a gloomy picture on the high street retailers John Lewis and Next, both reported an increase in sales over the Christmas period.
research revealed that administrations increased by 10 percent across all industry sectors.