General retailers top East Midlands profit warning chart

Dan Hurd

The general retail sector has issued more profit warnings than any other sector in the East Midlands, according to new research published today.

A new report produced by EY has found that the sector was responsible for 20 per cent (64 out of 316) of all profit warnings issued by listed companies in the region over the last 20 years.

The sectors to issue the second and third highest number of profit warnings over the last two decades were FTSE support services (40) and FTSE construction & materials (32).

Dan Hurd, EY’s head of restructuring for the Midlands, said: “When EY started tracking UK profit warnings in 1999, just 13 per cent of households had internet access, the first smart phone was still a decade away and fax machines still had a prominent place in our offices.

“In the last two decades we’ve seen radical changes not only in technology, but also our economy and capital markets. In 2019 news travels fast, and capital also moves with increasing pace. Combined with a heightened level of uncertainty, this has significantly changed the speed of stakeholder response to profit warnings.

“General retailers have felt the impact of these changes more than most. Technology has and will continue to disrupt the way in which we shop, forcing retailers to rethink their business models. It seems general retailers in the East Midlands have had a particularly hard time over the past two decades, which may in part be due to an inability to act quickly enough to these changing consumer habits. Once sales start to slip, companies quickly become starved of cash, leading to a downward spiral making it difficult to find the resources to invest in the changes needed. FTSE general retailers must look to adapt for the future or face further financial difficulties.”

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