THE rough ride for retailers is expected to continue into this year, with new figures indicating a rise in companies going into administration in the last quarter.
According to business advisory firm Deloitte, the total number of retailers in England and Wales slipping into administration went up from 165 in 2010 to 183 in 2011, a rise of 11%. Administrations accelerated in the final quarter of the year.
Blacks and La Senza have both already reported they will appoint administrators in 2012, as problems continue on the high street.
Deloitte’s North East restructuring services director Neil Matthews said: “Many retailers would have been banking on the busy Christmas period to give them a much-needed sales uplift, but retailers were forced into discounting at levels last seen in the aftermath of the collapse of Lehman Brothers, putting severe pressure on margins.
“We are likely to see a further spike in retail administrations in the first quarter of 2012 as retailers buckle under the pressure of VAT payments falling due, impending rent payments, the increased popularity of shopping online and the traditional decline in footfall as the attractive year-end sale offers come to an end.
“Moreover, what stands out in 2011 is the significant increase in household name retailers that have gone into administration including Barratts, Oddbins, Jane Norman, TJ Hughes, Habitat and Homeform.
“Collectively, the plight of these companies shows the depth of the impact of the consumer recession, with more casualties anticipated.”
While the number of retail administrations rose in 2011, company administrations overall were down 4% from 2,086 to 2,010.
The company’s Consumer Tracker, which records consumer spending habits, indicated a drop in income for one in five households, and said 36% were spending less on clothing and footwear and 28% on furniture and homeware.