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Exclusive: High street closures gather pace as credit pressure mounts

Some 265 branches of fashion multiples shut their doors in the first six months of the year – seven times the number of net indie closures in the same period.

According to research firm Local Data Company (LDC) and accountants PwC, the six months to the end of July saw a net 3.6% decline in high street fashion multiples. LDC has previously revealed that in the same period, net closures for fashion indies totalled 35, a 0.43% drop.

A total of 953 fashion indies closed in the period but were offset by 918 openings.

The figures come on the back of official data published for September, which showed that retail price inflation (RPI) rose 2.6% - leaving retailers facing a £175m rise in business rates next year.

And despite months of canvassing by business leaders, last week government representatives indicated there was little more they would or could do to ease pressures around credit insurance.

Emails seen by Drapers reveal that although the Department for Business, Innovation & Skills (BIS) promised to hold talks with insurers at the start of the summer, a meeting with only one representative has taken place.

The unnamed insurer confirmed that retail was one of the sectors hit hardest by the recession, but said they “weren’t supportive of government intervention”.

In the emails, senior policy adviser Thomas Gelderd said measures such as the top-up scheme introduced in 2009 had not been popular. “There would have to be something that had altered within the retail or credit insurance sectors for us to look at another form of top-up scheme,” he said.

Gelderd is now planning to meet with the British Retail Consortium (BRC) “to get a broader sense of how the credit insurance market is functioning throughout the retail industry”. He did not respond to requests for a comment.

But many in the industry are frustrated at the slow pace of change.

“There seems little appetite from government to do anything about this, which is unbelievably complacent, said Paul Turner-Mitchell, director of Rochdale indie 25 Ten Boutique. 

Nick Madlani, financial controller of Luke Roper, said while credit for his business had eased in recent months, “[the Government] is just washing its hands of it”.

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