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Fashion administrations rise 28% in H1

Total retail administrations fell by 30% for the first half of 2008 against last year, but fashion retail insolvencies rose by 28% during the period according to the latest research by Deloitte.

Some 40 clothing, fashion and cosmetics companies fell into administration in the first half of 2008 against 33 insolvencies in the first half of 2007.

Lee Manning, reorganisation services partner at Deloitte, said: "While the decrease in administrations is surprising, there are other trends playing in the market which have caused this somewhat counter-cyclical set of numbers. Traditional book, music and DVD retailers largely as a result of competition from the internet. The drop-off in figures in these sectors this year shows that the worst effects of this maturing market may have been felt. The same cannot be said for fashion clothing, however, where we are starting to see the effects of the credit crunch: there has been a 28% increase in administrations in this sector this year. Fashion is often one of the first sectors to be hit hard as consumers' discretionary spend is tightened and those retailers whose customer offering isn't spot on experience sales slippage."

Deloitte said that the administration figures were generally skewed towards smaller businesses because larger businesses were better suited to being restructured.

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