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20/08/2012

More than half of jobs survive insolvency in the retail sector

More than half of jobs survive insolvency in the retail sector

Analysis of major retail insolvencies since 2011 reveals that 53% of jobs are preserved during the insolvency process, while 48% of stores survive. Insolvency trade body R3 has been tracking the survival rate of jobs and stores over the last 18 months for major retailers including Blacks, Clinton Cards and Aquascutum.

R3 President Lee Manning comments:

“These figures show that the insolvency process, whilst never good news, can result in significant parts of the business surviving. The fact that over 50% of jobs remain intact is positive given the trouble a business is likely to be in at the start of insolvency – by definition unable to pay debts as they fall due.

“Much of the retail sector needs to change its methods of meeting customer expectations or face extinction. Store portfolios are simply too large at present, so shedding some unprofitable stores is part of this evolution. In fact, according to figures from Deloitte, we could be seeing significant downsizing of between 30-40% over the next 3-5 years.

 

Major Retail failures 2011/12


(Pre-insolvency) Stores Employees (Post-insolvency) Stores Employees


Blacks / Millets 313 3,885 224 2,750
Focus DIY 180 4,000    55 1,000
Habitat 33 750               3 150
Homeform+ 160 1,300    50 740
(Moben Sharps Dolphin)
Jane Norman 89 1,600    33 1,200
La Senza 146 2,600    60 1,300
Past Times 47 1,500    Nil Nil
Peacocks 614 7,500    388 4,320
Oddbins 139 600    43 150
TJ Hughes 57 4,000    15 1,800
Stylo Barratt 191 3,840    90 2,240
Hawkins Bazaar 65 380    8 80
GAME 610 6,000    333 3,896
Alexon* 75 3,000    50 2,700
Clinton Cards 784 8,000    400 4,500


Julian Graves (Deloitte) 189 755 n/a - still trading n/a
Allders of Croydon (Duff & Phelps) 1 330 n/a - still trading n/a
Allied Floors (Duff & Phelps) 9 41   9 41
Aquascutum (FPR Advisory)* 3 250   3 135
7 (outlet stores)

Fenn Wright Manson (Zolfo Cooper) 17 350    8 130
Ethel Austin (Duff & Phelps) 41 500    20 (sold) 198
9 (trading under admin)  
3770 51,181    1801 27,330

 

*excludes concessions
+excludes 1,500 fitters and designers (self-employed)

 


R3 Press Office

Notes to editors:

  • R3 is the trade body for Insolvency Professionals and represents the UK’s Insolvency Practitioners.

  • R3 comments on a wide variety of personal and corporate insolvency issues. Contact the press office, or see www.r3.org.uk for further information.

  • R3 promotes best practice for professionals working with financially troubled individuals and businesses; all R3 members are regulated by recognised professional bodies
     
  • R3 stands for 'Rescue, Recovery, and Renewal' and is also known as the Association of Business Recovery Professionals.