Despite several large retailers going into administration last year (and most recently Bank Fashion), it’s nice to see that the number of retailers entering the insolvency process is in fact falling year-on-year.
According to figures from Deloitte, the number of retail administrations fell from 183 in 2013 to 119 in 2014 (a drop of 35%).
Interestingly, the overall number of businesses in administrations last year also fell, but only by 20%. Meanwhile, there is not so good news for financial or IT firms as 2014 saw an increase of 3.9% between them.
Restructuring Partner at Deloitte, Lee Manning, said “After a few turbulent years, we saw fewer casualties in the retail sector in 2014. As the economic situation improved, consumer confidence increased and the retail industry benefited”.
Perhaps the fall in retail administrations is also due to more companies securing negotiations with landlords about rent as well as considering a CVA as a solution. A Company Voluntary Arrangement avoids the administration route and allows the directors to stay in control while paying back debt in affordable instalments.
Read our Retailer Rescue page for details on how a CVA can terminate rent leases and help a struggling retailer improve cashflow.