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Retail insolvencies set to increase in New Year

Hundreds of retailers are in danger of going bust in the new year, according to the UK's largest insolvency specialist.

Begbies Traynor has placed 323 UK retailers on its "critical watch list", which it defines as having a 70% chance or more of failing.

Begbies Traynor said banks were likely to support retailers until Christmas but a raft of insolvencies was likely to follow in the new year.

Begbies Traynor partner Mark Fry said: "Banks will be very reluctant to pull down any more retailers than they absolutely have to."

Fry added: "No matter how poor a festive season they have, the banks' position will be better in early January, because at least some of that stock will have been turned to cash, which will have reduced what is normally the low point in the annual cycle."

But Fry said: "there is every chance we will witness a rash of retail failures at the start of 2009."

Fry expects businesses with a weak online offer and those that lack diversity to face the biggest challenges.

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