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Two thirds of staff and stores survive administration process

Tough trading conditions over the past 12 months have cost nearly 20,000 store workers their jobs but staff and store are surviving, according to research from FRP Advisory.

Despite retailers such as La Senza, Peacocks and Barratts Priceless calling in the administrators within the last few months, two thirds of staff and stores survived the process after such companies continued to trade, albeit from a smaller store portfolio.

Large retailers employing 39,000 staff fell into administration last year. However, 27,200 emerged from the administration with their jobs intact.

The Times said in the first two months of the year, retail victims such as Peacocks had affected 21,300 roles in the UK but 14,200 people had emerged from the process of administration to keep their jobs.

The report also found that 62% of stores emerged from administration under new ownership since the start of last year – but almost 1,700 stores were left empty.

The analysis comes as business insolvency rates in the UK have fallen back to the same rate as January 2011.

Credit ratings company Experian said that the overall rate of insolvencies fell from 0.11% in December to 0.07% in January – the same rate as January 2011. However, the insolvency rate of firms with more than 501 employees increased to 0.20%, up from 0.07% the year before.

Max Firth, UK managing director for Experian’s Business Information Services division, said: “The fall in the overall rate of insolvencies has taken it back down to the level it was at a year ago, which is certainly positive. January generally tends to be a good month, with many businesses benefiting from the Christmas trade. When coupled with steady improvements in the underlying financial strength of businesses, it means that we can entertain some cautious optimism for the months ahead.”

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