Retailers 'facing critical financial issues'

molerat

http://www.bbc.co.uk/news/business-20832355

Nearly 140 retailers are in a "critical condition" despite Christmas being their peak trading time, business recovery firm Begbies Traynor has said.
Its UK business solvency survey found 13,700 more firms were in distress, a 35% rise in the quarter to December.
It said many could struggle to meet their quarterly rent payment, due on Christmas Day.

Is it going to be a Merry Xmas ?

The report suggested the worst affected retailers include specialists in books, news and stationery, where distress signals were 85% higher on the previous quarter.

I wonder if they have anyone particular in mind, my local WHS has just downsized to 2/3rds its old size.

On a positive note we are getting a Brantano, Bensons Beds and Costa have just applied for a 2nd shop in the town.

Graham_Devon

It always seems to be rent that's the issue.

Surely landlords would prefer to charge less and get something, than to see the business paying them fold?

Thrugelmir

Wonder if Amazon will now become a hot news topic in the New Year.

Guess it's up to us as consumers to make a choice of whether we want a High Street or not.

flashnazia

Meanwhile on the Grabbit board some of the usual culprits are striving away to find the latest 'glitch' or 'code stack' in order to rip off retailers and then complain that they 'will never shop there again' if their dodgy orders are declined.

Yes rent is an issue but so is the problem of 'consumers' having a misguided sense of entitlement; as if shops are evil for wanting to make a profit hence it's somehow morally ok to rip them them off...

Mrs_Bones

Several major stores have closed recently in my local town as well as some smaller independent shops. Staples have also plastered their windows with closing down signs, so that's another to disappear shortly. Having worked in retail for many years and still knowing many people involved in it the confidence is not good.

Looking at the news this morning I'm also feeling terribly sorry for those caught up in the floods. Apart from the immediate misery that is being caused to many these events are going to have far reaching consequences. Farmers are having their crops destroyed. Shop owners are seeing their premises flood, often not for the first time this year. They are coping now with lost of sales in what should be their busiest trading period and quite possible a large hike in insurance if they can even get it. It will be no surprise if many of those retailers decided enough is enough and call it a day.

The shops in the high street are getting hit from many directions.

Thrugelmir

Graham_Devon wrote: »

It always seems to be rent that's the issue.

Not sales?

Carl31

books, stationery and newspapers

All things not needed by the smartphone/tablet generation.

In fact, you could argue this lack of requirement extends to shops in general nowdays

GeorgeHowell

That's right, it isn't necessarily all due to supressed demand. Bad management, non-viable business models, and competition from internet shopping are likely to be factors in many cases.

kabayiri

The almost meteoric growth in pound shops demonstrates that there is still a viable business model for shopping on the high street. It's just not the same business model as the one about in the 70s; which is bad news for W H Smiths and their ilk.

Thrugelmir

kabayiri wrote: »

The almost meteoric growth in pound shops demonstrates that there is still a viable business model for shopping on the high street.

Squeezing margins just puts further pressure on other retailers. In particular independents. Ultimately will result in less and less choice. As the retail market will be dominated by global US corporations.

MacMickster

The cashflow problems of high street retailers in recent years has become apparent from the pattern of the sales (although not quite whatThrugelmir meant).

The New Year sales became the boxing day sales became the week before Christmas sales, and now seem to be the November/December sales, all to try to generate cashflow at a time of year when cashflow never used to be a problem.

The problem is that they have effectively brought forward much of the spending that they used to generate in January and February through sales. Consequently, I think that the March quarter day will see a whole raft of retail names going under in 2013.