Retail administrations rise by 15 per cent
Shoppers abandoning high street stores for internet rivals helped trigger a 15 per cent rise in retail administrations in the first quarter of 2012, a report revealed today.
Accountancy firm Deloitte said a total of 69 retailers collapsed, up from 60 in the same period the previous year, as the squeeze on consumer spending and the growing popularity of online retailers took their toll.
Fashion chain Peacocks, video games retailer Game Group, outdoor specialist Blacks Leisure, gift seller Past Times and lingerie firm La Senza all threw in the towel in the period, between them accounting for nearly 10,000 job losses.
The collapse of such big names meant the number of redundancies was likely to have been far higher than a year ago, the report added.
Lee Manning, a restructuring services partner at Deloitte, said: "The first quarter of 2012 is particularly significant given the high-profile nature of the companies we have seen enter administration."
The number of administrations was 64% higher than in the final quarter of 2011, but there is normally a rise in the first three months of the year when trading slows down after the Christmas peak and retailers struggle to pay their quarterly rent bill.
Retailers such as Game and Peacocks were bought out of administration but have seen large chunks of their store estate closed.
But Deloitte said many retailers across the UK still have too many stores as shoppers increasingly look for cheaper deals online.
It has suggested in a recent report that chains may need to reduce store numbers by 40%, which is likely to cause further pain for the UK's beleaguered high streets.
Mr Manning added: "Whilst the quarterly rent day often sets the timing for the insolvency, a significant trigger in a number of recent administrations is that many retailers have too many marginal stores.
"A fast-changing retail environment will require certain businesses to reassess their store portfolios, not as a matter of choice, but in order to survive."
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