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Retail businesses in administration set to rise in coming months, warns BRC

The rise in business rates in April will fuel growth in the number of retail businesses going into administration, the British Retail Consortium (BRC) has warned.

The total number of retailers in England and Wales going into administration in 2011 increased by 11% from 165 in 2010 to 183 in 2011, according to research released today by business advisory firm Deloitte. 

A 5.6% rise in business rates in April is likely to accelerate this trend, the BRC has stressed, in response to the Deloitte research.

The research found administrations for the fourth quarter of 2011 were up more than 25% compared with the same period a year earlier.

According to Deloitte, 42 retailers in England and Wales drafted in administrators in Q4 of 2011. The previous quarter had seen 33.

Deloitte anticipates a further rise in retail administrations as retailers come under pressure from VAT and rent payments falling due, as well as the growth of online shopping and a decline in traditional footfall as year end Sales come to an end.

BRC director general, Stephen Robertson, said that seeing such a high number of failures in the final quarter of the year is “particularly alarming”.

He added: “The UK’s governments need to support the sector’s efforts to survive, thrive and maintain jobs by holding back the costs for which they are responsible, including business rates, retail levies and the burden of regulation.”

Clothing businesses that have suffered near collapse in 2011 include denim retailer D2, lingerie retailer La Senza and outdoor specialist Blacks.

The BRC’s Retail Sales Monitor for December, measuring the sector’s performance during the most critical month of the year, will be released tomorrow (Tuesday).

Readers' comments (4)

  • This is the year of some quite high profile casualties in my opinion. From the level of discounts you can see all over the high street and the amount of time those retailers now spend on promotion it can't be long before one or two of them go under. Its make or break in 2012 for sure.

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  • I am not sure this constant doom & gloom from the likes of the BRC does anything to help consumer sentiment. Yes, times are tough and some people will struggle but if you have got the right product and brands in your stores, you will still make sales regardless. Perhaps we should be looking at this in relation to the retailers that have already gone under?

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  • I had my best trading ever over Christmas and New Year and although I am only a small independent from what I saw everywhere was busy and had good footfall. I hope that this is a sign that things might improve this year. I know there is a lot of pessimism out there still but sometimes pessimism distracts from making sure you are doing what's right for your business. Less doom and gloom more action.

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  • Things aren't bad, they're rather good! You will always get businesses going in administration because they are badly run with a business model that can never succeed and they will be allowed to do it again and again and again. Companies should look a lot closer to home instead of blaming the economy for their woes. There will always be cowboys and chancers running businesses, and the retail clothing trade is certainly no exception.

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