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Monthly Insolvency Statistics: February 2024

in Research and Statistics

The second monthly insolvency statistics have been released for 2024, focusing on February. Here we provide a detailed overview. Company Insolvencies February 2024 saw 2,102 registered company insolvencies through England and Wales. This is an increase of 17% when compared to the amount registered in the same month of 2023. It is also higher compared to January 2024 figures and that when Government support measures were in place in response to the COVID-19 pandemic.The company insolvencies for February 2024 consisted of:1,707 Creditors Voluntary Liquidations (CVLs) – 12% higher than in February 2023 217 Compulsory Liquidations – 35% higher than in February 2023 166 Administrations – 54% higher than in February 2023 12 Company Voluntary Arrangements (CVAs) – identical to the amount in February 2023There were no receiverships registered.A higher number of Compulsory Liquidations, CVLs and Administrations seem to be the driving force of the increase in company insolvency statistics compared to February 2023.It is important to note that now, company insolvency numbers have returned to and exceeded pre-pandemic levels.Between 26 June 2020 and 29 February 2024, 52 moratoriums were obtained in England & Wales, along with 22 companies having a restructuring plan registered at Companies House.Moving on to the statistics for Scotland and February 2024 saw 94 registered company insolvencies – quite similar to the levels noted in January 2024. Compared to February 2023 figures, the same month of 2024 saw an increase of 9% in registered company insolvencies. February 2024 figures are made up of 58 CVLs, 33 compulsory liquidations and 3 administrations. No CVAs or receiverships were recorded.Historically, compulsory liquidations have led the way for the company insolvencies in Scotland. But since April 2020, CVL numbers remained higher than compulsory liquidation numbers.Between 26 June 2020 and 29 February 2024, no moratoriums were obtained for companies in Scotland. Two companies did register a restructuring plan at Companies House.For Northern Ireland, 26 company insolvencies were registered in February 2024 – this being twice as many as recorded in February 2024. Registrations consisted of 14 compulsory liquidations, 9 CVLs, 3 administrations. No receiverships or CVAs were recorded for this period. Individual Insolvencies England and Wales had 10,136 Individual Insolvencies registered in February 2024. This is 23% more than what was registered in February 2023 and also a significant rise compared to January 2024. It is thought that the reason for the increase is the all tools; DROs, bankruptcies and IVAs, saw an increase in this period.Delving deeper, the registrations are broken up into:3,007 Debt Relief Orders (DROs) – 44% higher than in February 2023 6,420 Individual Voluntary Arrangements (IVAs) – 16% higher than in February 2023 – an unusually high amount due to some IVAs being registered only now, but approved 2 or more months earlier 709 Bankruptcies (split as 594 debtor applications and 115 creditor petitions) – 16% higher than in February 2023Northern Ireland had 112 Individual Insolvencies registered in February 2024 – identical to the amount noted in January 2024. Numbers are made up of 90 IVAs, 11 DROs and 21 bankruptcies. Total numbers are 13% lower than the same month a year previous. Comparing to pre-pandemic levels, since March 2020, levels of individual insolvencies have been lower in Northern Ireland.You can refer to the full report here.

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Monthly Insolvency Statistics: February 2024

Monthly Insolvency Statistics: January 2024

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The first monthly insolvency statistics have been released for 2024, focusing on January. Here we provide a detailed overview. Company Insolvencies January 2024 saw 1,769 registered company insolvencies through England and Wales. This is an increase of 5% when compared to the amount registered in the same month of 2023. Compared to December 2023 figures it is a slight drop.The company insolvencies consisted of:1,294 Creditors Voluntary Liquidations (CVLs) – 6% lower than in January 2023 339 Compulsory Liquidations – 66% higher than in January 2023 120 Administrations – 40% higher than in January 2023 16 Company Voluntary Arrangements (CVAs) – 14% higher than in January 2023There were no receiverships registered.A higher number of Compulsory Liquidations and Administrations seem to be the driving force of the increase in company insolvency statistics compared to January 2023. CVAs also saw an increase.Compulsory Liquidations and Administration levels fell, by 18% and 8% respectively.It is important to note that now, company insolvency numbers have returned to and exceeded pre-pandemic levels.Between 26 June 2020 and 31 January 2024, 52 moratoriums were obtained in England & Wales, along with 22 companies having a restructuring plan registered at Companies House.Moving on to the statistics for Scotland and January 2024 saw 88 registered company insolvencies – quite a drop compared to December 2023 and a 19% decrease compared to January 2023 figures. January 2024 figures are made up of 46 CVLs, 34 compulsory liquidations, 7 administrations and 1 CVA. No receiverships were recorded.Historically, compulsory liquidations have led the way for the company insolvencies in Scotland. But since April 2020, CVL numbers remained higher than compulsory liquidation numbers.Between 26 June 2020 and 31 January 2024, no moratoriums were obtained for companies in Scotland. Two companies did register a restructuring plan at Companies House.For Northern Ireland, 30 company insolvencies were registered in January 2024 – this being 114% higher than that in January 2023 and just a total of 5 more than the recorded figure for December 2023. Registrations consisted of 8 compulsory liquidations, 17 CVLs, 4 CVAs and 1 administration. No receiverships were recorded for this period. Individual Insolvencies England and Wales had 8,089 Individual Insolvencies registered in January 2024. This is 4% more than what was registered in January 2023. It is thought that the reason for the increase is the rise of DROs and bankruptcies, as IVAs decreased.Delving deeper, the registrations are broken up into:2,793 Debt Relief Orders (DROs) – 60% higher than in January 2023 4,528 Individual Voluntary Arrangements (IVAs) – 16% lower than in January 2023 768 Bankruptcies (split as 606 debtor applications and 162 creditor petitions) – 20% higher than in January 2023Northern Ireland had 112 Individual Insolvencies registered in January 2024. Numbers are made up of 76 IVAs, 16 DROs and 20 bankruptcies. Total numbers are 7% lower than the same month a year previous. Comparing to pre-pandemic levels, since March 2020, levels of individual insolvencies have been lower in Northern Ireland.You can refer to the full report here.

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Monthly Insolvency Statistics: January 2024

Company Insolvency in Scotland

Is there a genuine company rescue culture in Scotland? There is only one company driving the rescue culture in Scotland, and you have found it!Our firm KSA Group, who run this website, are responsible for a significant proportion of CVA led rescue work in Scotland.If you run an insolvent or struggling Scottish company the chance of rescue is low. Amazingly, less than 1% of insolvent companies are rescued by a company voluntary arrangement or CVA each year!  This is compared to England and Wales, where proportionally, the CVA is used 4 times as often.So always ask your advisors these questions - What about a CVA - would that work? What is the comparison between CVA and liquidation? What is the comparison between CVA and administration?

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Company Insolvency in Scotland

Q4 2023: Company Insolvency Statistics

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The quarterly company insolvency statistics have been released, covering Q4 2023 (October to December). Since this dates the final quarter of the year, an annual summary can be noted: 2023 saw the highest annual number of company insolvencies since 1993. The total of 25,158 registered company insolvencies is broken down into:20,577 Creditors Voluntary Liquidations (increased by 9% from 2022) 2,827 Compulsory Liquidations (increased by 44% from 2022) 1,567 Administrations (increased by 27% from 2022) 185 Company Voluntary Arrangements (increased by 67% from 2022) 2 Receiverships One for every 186 active companies fell into insolvent liquidation in 2023, making the liquidation rate 53.7 per 10,000 active companies. This was an increase compared to 2022s recording. In fact, the rate in 2023 was the highest level since Q3 2014.It should be noted that though levels of each procedure rose compared to 2022, many remained below levels seen pre-pandemic. Taking it back to a quarterly summary: Q4 2023 recorded 6,788 company insolvencies. This splits into 5,578 Creditors Voluntary Liquidations (CVLs), 780 Compulsory Liquidations, 379 Administrations, 50 Company Voluntary Arrangements (CVAs) and 1 Receivership.Overall, the total amount of company insolvencies in Q4 2023 was 9% higher than that in Q3 2023, and 14% higher than in Q4 2022. Looking more historically, this quarter saw the highest quarterly total insolvencies since Q4 2008.Being even more specific, the highest quarterly number of CVLs was recorded since 1960. Compulsory Liquidations increased by 6% compared to Q3 2023 and Q4 2022, but Administrations fell 17% compared to Q3 2023, though still remained higher than levels in 2021 and 2022. CVAs rose by 22% compared to Q3 2023, and was 100% up on Q4 2022 numbers.Between 26 June 2020 and 31 December 2023, 49 companies obtained a moratorium and 22 companies had a restructuring plan registered at Companies House.In terms of liquidation rates, 2023 Q4 had a rate of 53.7 company insolvencies per 10,000 active companies. This was 1.3 higher than in Q3 2023 and 4.1 higher than in Q4 2022.Though company insolvency volumes hit a 30-year high in 2023, the amount of companies on the companies house register has increased over time. This means the 2023 rate remained lower than the peak rate of 94.8 insolvencies per 10,000 active companies during the 2008-09 recession. Company Insolvencies per Industry The five industries which experienced the highest number of insolvencies in 2023 are as follows:Construction (4,371…responsible for 18% of cases with industry captured) Wholesale and retail trade; repair of motor vehicles and motorcycles (3,929…responsible for 16% of cases with industry captured) Accommodation and food service activities (3,727…responsible for 15% of cases with industry captured) Administrative and support service activities (2,299…responsible for 9% of cases with industry captured) Professional, scientific and technical activities (2,001…responsible for 8% of cases with industry captured)Looking into all of the large industries, an increase was noticed in insolvencies registered in 2023 compared to 2022. Company Insolvency in Scotland Scotland recorded 314 total company insolvencies in Q4 2023 – just one more than the same quarter in 2022.Figures are broken down into 196 Company Voluntary Liquidations, 105 Compulsory Liquidations, 12 Administrations and 1 Company Voluntary Arrangement.Historically the volume of company insolvencies registered in Scotland has been driven by compulsory liquidations. However, during the coronavirus pandemic, almost three times as many CVLs as compulsory liquidations were recorded. Through 2023, CVL numbers were more than 1.5 times higher than the amount of compulsory liquidations.Between 26 June 2020 and 31 December 2023, no companies obtained a moratorium but 2 companies did have a restructuring plan registered at Companies House.In terms of liquidation rate for 2023, Scotland’s was 51.6 per 10,000 active companies. This is 5.9 higher than 2022s rate. Company Insolvency in Northern Ireland Northern Ireland recorded 81 total company insolvencies in Q4 2023 – an increase of 62% compared to the same quarter in 2022.Figures are broken down into 28 Company Voluntary Liquidations, 33 Compulsory Liquidations, 7 Administrations and 3 Company Voluntary Arrangements.In terms of liquidation rate for 2023, Northern Ireland’s was 25.5 per 10,000 active companies. This is 1.6 lower than 2022s rate.Please refer to the full report here.

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Q4 2023: Company Insolvency Statistics

Monthly Insolvency Statistics: December 2023

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The monthly insolvency statistics have been released for the month of December 2023.Overall it looks like the number of insolvencies are pretty flat compared to last month.  Of course the actual number of insolvencies isn't the whole story as some companies are much bigger than others.In the last few months there haven't been any larger companies in financial trouble with only Wilko going bust back in August.  At the beginning of this year we are hearing about other larger businesses in trouble.  Superdry have just turned to emergency funding to keep themselves afloat and at our end we are seeing some larger companies asking for help.  This may be due to the inflationary environment which has added to the cost of labour and materials.  In addition these larger companies have taken out loans at rock bottom rates and now beginning to see higher rates. Larger companies tend to resist this pressure for longer but eventually they need to ask for help and cut costs or raise prices (if possible) Company Insolvencies December 2023 saw 2,002 registered company insolvencies through England and Wales. This is an increase of 2% when compared to the amount registered in the same month of 2022. This is also higher than figures during the pandemic and pre-pandemic. Compared to November 2023 figures it is a slight drop.The company insolvencies consisted of:1,731 Creditors Voluntary Liquidations (CVLs) 153 Compulsory Liquidations 103 Administrations 15 Company Voluntary Arrangements (CVAs)There were no receiverships registered.CVLs (5% higher than in Dec-22) and CVAs (50% higher than in Dec-22) appear to be the drivers of the increase in company insolvencies, compared to December 2022. Compulsory Liquidations and Administration levels fell, by 18% and 8% respectively.Between 26 June 2020 and 31 December 2023, 49 moratoriums were obtained in England & Wales, along with 22 companies having a restructuring plan registered at Companies House.Moving on to the statistics for Scotland and December 2023 saw 108 registered company insolvencies (almost exact to the recorded figure for November 2023). This is made up of 65 CVLs, 40 compulsory liquidations and 3 administrations. No CVAs or receiverships were recorded.Historically, compulsory liquidations have led the way for the company insolvencies in Scotland. But through 2023 CVL numbers remained more than 1.5 times higher than compulsory liquidation numbers.Between 26 June 2020 and 31 December 2023, no moratoriums were obtained for companies in Scotland. Two companies did register a restructuring plan at Companies House.For Northern Ireland, 25 company insolvencies were registered in December 2023 – this being 67% higher than that in December 2022 and almost identical to the figure for November 2023. Registrations consisted of 6 compulsory liquidations, 17 CVLs, 1 administration and 1 CVA. No receiverships were recorded for this period. Individual Insolvencies England and Wales had 6,584 Individual Insolvencies registered in December 2023. This is 20% less than what was registered in December 2022. It is thought that the reason for the decline is the lack of IVAs, as DROs and bankruptcies increased.Delving deeper, the registrations are broken up into:2,472 Debt Relief Orders (DROs) – 25% higher than in December 2022. 3,616 Individual Voluntary Arrangements (IVAs) – 38% lower than in December 2022. 496 Bankruptcies (split as 386 debtor applications and 110 creditor petitions) – 22% higher than in December 2022.Northern Ireland had 76 Individual Insolvencies registered in December 2023. Numbers are made up of 60 IVAs, 6 DROs and 10 bankruptcies. Total numbers are 39% lower than the same month a year previous.You can refer to the full report here.

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Monthly Insolvency Statistics: December 2023

Monthly Insolvency Statistics: November 2023

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The monthly insolvency statistics have been released for the month of November 2023. In this article the findings will be explored. Company Insolvencies November 2023 saw 2,466 registered company insolvencies through England and Wales. This is an increase of 21% when compared to the amount registered in the same month of 2022. This is also higher than figures during the pandemic and pre-pandemic.The company insolvencies consisted of:1,962 Creditors Voluntary Liquidations (CVLs) 359 Compulsory Liquidations 133 Administrations 12 Company Voluntary Arrangements (CVAs)There were no receiverships registered.CVLs (23% higher in Nov-23 than Nov-22) and Compulsory Liquidations (22% higher in Nov-23 than Nov-22) appear to be the drivers of the increase in company insolvencies, compared to November 2022. Although CVAs also did see a 20% increase. Administration levels were similar to what it was in November 2022.Between 26 June 2020 and 30 November 2023, 47 moratoriums were obtained in England & Wales, along with 22 companies having a restructuring plan registered at Companies House.Moving on to the statistics for Scotland and November 2023 saw 109 registered company insolvencies. This is made up of 74 CVLs, 30 compulsory liquidations and 5 administrations. No CVAs or receiverships were recorded.Historically, compulsory liquidations have led the way for the company insolvencies in Scotland. But in the first 11 months of 2023 CVL numbers remained more than 1.5 times higher than compulsory liquidation numbers.Between 26 June 2020 and 30 November 2023, no moratoriums were obtained for companies in Scotland. Two companies did register a restructuring plan at Companies House.For Northern Ireland, 26 company insolvencies were registered in November 2023 – this being 30% higher than that in November 2022. Registrations consisted of 13 compulsory liquidations, 6 CVLs, administrations and 2 CVAs. No receiverships were recorded for this period. Individual Insolvencies England and Wales had 8,243 Individual Insolvencies registered in November 2023. This is 21% less than what was registered in November 2022. It is thought that the reason for the decline is the lack of IVAs, as DROs and bankruptcies increased.Delving deeper, the registrations are broken up into:4,292 Individual Voluntary Arrangements (IVAs) – 44% lower than in November 2022 3,290 Debt Relief Orders (DROs) – 45% higher than in November 2022 661 Bankruptcies (split as 522 debtor applications and 139 creditor petitions) – 18% higher than in November 2022.Northern Ireland had 111 Individual Insolvencies registered in November 2023. Numbers are made up of 70 IVAs, 21 DROs and 20 bankruptcies. Total numbers are 24% lower than the same month a year previous. Read the full report here.

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Monthly Insolvency Statistics: November 2023

What is a Zombie Company?

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A zombie company is simply a company that is neither dead or alive. In other words, it is in so much debt that any cash generated is being used to pay off the interest on the debt or not actually reduce it. The company must cut back as much as they can. This means that there is no spare cash or capacity for the company to invest or grow. This means that is unable to employ more staff but on the flip side as long as the company is not actually losing money on an operational basis it does not need to make further redundancies either.Many economists are arguing that the presence of some estimated 150,000 of these companies are taking market share and locking up talent that should be available to more dynamic and less indebted firms.The statistics are pointing towards this "zombie phenomenon". Insolvency statistics in February and March 2020 showed a rise that was suddenly stopped by the government's rescue plans in the face of the Covid-19 Pandemic.  Now insolvency rates are 50% below normal. Unemployment is lower than expected but productivity is also low. Why are there are so many of these firms?There are some obvious reasons:Interest ratesInterest rates have been very low for some time now so if you are in debt then interest rate payments are pretty low as well. What is more, interest rates have remained stable. This has given the impression that there is no crunch round the corner and has allowed companies to extend and pretend.Bounce Back Loans and CBILSCompanies will be paying back these loans over the next 6-10 years at low interest rates BUT will the repayments allow them any headroom to invest?Banks not wanting to call in loansSince the financial crisis some 12 years ago new liquidity rules and the presence of the Special Liquidity Scheme, and other lending initiatives, means that banks are reluctant to call in loans .If the banks really want to lend to companies then they can go cap in hand to the Bank of England. What is more asset values are depressed and there are not many buyers out there so some banks will wait before calling in administrators in the hope that any recovery will be better in the future.HMRC and the GovernmentHMRC have been concentrating on trying to keep companies afloat during the pandemic.  It is right that economic damage is tackled but HMRC has not been very tough on companies that are trading but are building up tax liabilities that they are unlikely to be able to recover. The government are also preferring the devil they know scenario. They do not want to "rock the boat" as it were so there is a bit of a culture of indecision. They worry, perhaps correctly, that any radical action is going to cause short term pain and exacabate the situation.Are you a zombie company and what should you do about it? Simply, you need to ensure that your debts are paid off quickly, repayments are reduced, or a proportion of them are written off. This will allow you to grow. If you are beginning to run up unsecured debts, ie trade creditors and HMRC then you need to act and perhaps a CVA or a Plan A could be an option. What are the risks? Any sudden change in the business or economic environment could be the catalyst for change. An increase in interest rates is being touted as the likeliest "zombie killer" but a change in the banks or Government's attitude to these companies could be equally dangerous. A strong improvement in the economy could also be their deathnell as quicker and more nimble companies will take advantage of the new opportunities presented leaving the zombies behind.The main thing about interest rates is that it will affect thousands of people on mortgages as well which will depress demand for companies goods and services so "zombies" will be hit by a double whammy!

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What is a Zombie Company?

Company Insolvencies in Q4 2020 were lower compared to that of Q4 2019 for England, Wales, Scotland and Northern Ireland

in News Research and Statistics

The statistics for Company Insolvencies in UK, Northern Ireland and Scotland for Q4 have been released and will be further explored here.Note that caution must be applied when interpreting such statistics. The emergence of the coronavirus pandemic has had at least some effect on the timeliness of insolvency registration, especially since the March lockdown, when insolvency practitioners, intermediaries, Companies House and courts were unable to process insolvencies as per the usual manner. So what key points were taken? England and Wales Q4 In Q4 2020, there were 3,071 registered underlying company insolvencies – this being an increase of 17% from the previous quarter. The increase was primarily driven by an increase in creditors voluntary liquidations (CVLs) and company voluntary arrangements (CVAs). Comparing all other company insolvency procedures, they saw a decrease when compared to the statistics from Q3 2020.Though the absolute numbers of company insolvencies rose between Q3 and Q4 2020, the company liquidation rate per 10,000 active companies fell in the 12 months ending Q4, compared to 12 months ending Q3 2020. It went from 32.3 to 29.2. Ultimately this is due to the numbers of all company insolvency procedures being lower in Q4 2020 than Q3 – apart from CVAs. This liquidation rate, for the 12 months ending Q4 2020, fell compared to 12 months ending Q4 2019 – when the rate was 42.1.It is also key to note that compared to Q4 2019, company insolvencies were lower in Q4 2020. 2020 The total number of company insolvencies in the whole of 2020 reached its lowest annual level since 1989.There were just 12,557 underlying company insolvencies – a decrease of 27% compared to 2019 numbers. It is thought these numbers are driven by a low number of underlying CVLs (hitting its lowest annual level since 2007). Compulsory liquidations and CVAs also reached its lowest annual levels since 1973 and 1993 respectively.It is likely that at least part of the reduction in company insolvencies in 2020 was driven by Government measures put in place to respond to the unprecedented coronavirus pandemic. Insolvency tool analysis In terms of company insolvency tools, all other than administrative receivership appointments, which are low anyway, saw a decrease compared to that in 2019:Compulsory liquidations decreased 55% CVAs decreased by 26% CVLs decreased by 22% Administrations decreased by 16% There was just 3 receiverships - up from the 1 in 2019.There was a 5% difference seen in the total amount of CVLs making up all underlying company insolvencies; in 2020 it was 75% compared to 70% in 2019. With this, a decrease was seen in the amount of company insolvencies from use of compulsory liquidations (17% to 11%). Administrations accounted for 12% of all underlying company insolvencies, up by a percent compared to 2019. The proportion of insolvencies made up of CVAs stayed unchanged, at 2%. Industry analysis In the 12 months ending Q4 2020, the three industries experiencing the highest number of insolvencies are as follows:Construction (with 2,042 insolvencies) Accommodation and food services (1,701 insolvencies) Wholesale and retail trade; repair of vehicles industrial grouping (1,673 insolvencies)Decreases were seen across most other industries, compared to 2019 figures. Company Insolvency in Scotland Q4 2020 saw 146 total insolvencies in Scotland, 44% lower than in the same quarter of 2019. It involved 45 compulsory liquidations, 77 CVLs and 23 administrations. There was 1 receivership and no CVAs.Historically, company insolvencies in Scotland are driven by compulsory liquidations which compares to that in England and Wales where CVLs tend to drive compulsory insolvency trends. This being said, in the last three quarters, fewer liquidations have been seen in Scotland than CVLs. Company Insolvency in Northern Ireland Q4 2020 saw just 24 company insolvencies in Northern Ireland. This is a fall of 79% compared to Q4 2019. Statistics comprised of 15 CVLs, 6 CVAs, 2 compulsory liquidations and 1 administration.Read the full publication of statistics here.

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Company Insolvencies in Q4 2020 were lower compared to that of Q4 2019 for England, Wales, Scotland and Northern Ireland
closing shop

Retailers increasingly turn to CVAs to restructure their businesses

UK High Street flagging as retailers increasingly turn to CVAs Figures from the British Retail Consortium (BRC) show that the UK high street and retail performance is facing difficulty. In 2016/2017 we saw a sharp decline in performance and it has been stressed that this has continued.This has been borne out in the high number of companies entering administration or seeking company voluntary arrangements (CVAs) within the last 12 months.Here, we'll take a closer look at UK high street performance and the factors causing it to suffer. Firstly, What has happened to high street performance in the UK? These are the key statistics from the latest BRC research:Overall year-on-year (YOY) retail sales fell 2.7% in May 2019 (the biggest decline on record!) Food sales dropped for the first time since June 2016, with further declines in clothing, outdoor goods and footwear 1,566 stores have had to reduce rent amounts Retail & Leisure Parks account for a third of all closures in the UK as a result of a CVA, administration or liquidation Nottingham city centre has experienced the most closures through either a CVA, administration or liquidation Birmingham holds the most closures of all UK Urban Areas. They've had 26 rent reductions and 23 closures since January 2018 Of all the Counties, Greater London saw the greatest damage, by far Footfall was down 1.4% on average over the 12 months to March 2018 As in 2016/2017 figures, the South East saw the most rapid fall in footfall There has been 140 closures and only 6 rescues of retail/leisure operators, since January 2018 To date, May 2019, 24 companies have failed, 743 stores have been affected and 31,250 employees have been impacted.How has this affected specific businesses? Several UK high street retailers have hit the headlines after being forced to take action due to falling footfall, including:Select: Closure of 14 stores, despite 50 being earmarked. Additionally, they have requested for a rent reduction L K Bennett: A notice of intention for Administration was filed, leaving 41 UK stores at risk as well as 480 UK staff affected Poundworld: Saw the closure of almost 200 stores, as they faced liquidation Mothercare: 60 store closures with 77 stores having their rent reduced by 17% Toys R Us: Entered administration after failing to find a buyer, having implemented a CVA New Look: Closed 60 stores and cut 980 jobs after agreeing to a CVA Homebase: A CVA vote, left 45 stores to cease trading with 1500 jobs at riskDespite this, six retailers have been saved. See the cases of House of Fraser, Arcadia, Office Outlet, Patisserie Valerie, HMV and Evans Cycles. What's caused this decline in high street performance? Economic and political uncertainty, falling consumer confidence, changing consumer habits and rising inflation have all contributed to the long-term decline of the UK high street.However, the most pressing factors impacting the retail sector in May 2019 were:1. Low Growth OnlineKPMG's UK retail partner, Paul Martin, stressed: “The extremely low growth online is real cause for concern, especially with almost a third of all non-food sales today being made online. This trend has continued to manifest itself over the last year and requires real focus from the retail community.”2. Business ratesIncreased business rates are potentially the biggest single contributing factor when it comes to UK high street performance.Gary Grant, founder of high street toy retailer, The Entertainer commented: "Landlords are being very realistic about their rent, but the one thing that is not negotiable are business rates."[The retail sector] is seeing many stores empty for long periods of time and the biggest issue is that [retailers] can’t open stores.''“Business rates are out of line now with retail turnover. Business rates are the real killer. Any increase in cost where you have flat and declining turnover is going to put pressure on the bottom line.''“The Government just haven’t got it. They need to take some responsibility for the high street’s decline.”Likewise, Helen Dickinson, OBE, BRC's Chief Executive, states how such rates prevent retailers from ''investing in their physical space. We have a broken tax system, which sees retailers paying vast sums of money regardless of whether they make a penny at the till, and yet the Government is failing to act.''With the UK high street continuing to suffer, it pays to know your options as a company boss. Taking difficult yet decisive decisions at the right times will put you in the best possible position to keep your company trading successfully.If you are worried about declining UK high street performance and the prospect of a CVA, contact the experts at Company Rescue today. Take a look at our site for many useful pages of advice.

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Retailers increasingly turn to CVAs to restructure their businesses