UK retailers ‘sleepwalking into administration’

Another bad week for the high street was confirmed yesterday as clothes retailer Austin Reed filed for administration, putting 1,200 jobs at risk.

The news follows the news that BHS slipped into administration on Monday morning, with the jobs of 11,000 people hanging in the balance.

Austin Reed has appointed Alix Partners as administrators, and so far has had 20 expressions of interest, according to reports.

Over the past 12 months the 116-year-old retailer has been through a CVA, closed 31 of its outlets and is selling its 35,000 sq ft Regent Street flagship store.

Meanwhile, a leading retail analyst has warned that Austin Reed (which has stores in Nottingham and Grantham) and BHS might not be the last high street casualties this year.

Richard Lim, chief executive at Retail Economics said: “The recent events at BHS focuses the mind on how many other traditional UK retailers are sleep-walking into administration.

“Many of the economic factors supporting households through last year are beginning to unwind and darker clouds are forming on the horizon.

“The boost to household budgets from the slump in global oil prices has now largely run its course.

“The impending rise in inflation will hold back household spending power while employment growth has slowed and there is less scope for families to dip into their savings than last year. Consumers are now more pessimistic about the future of the economy than at any time in the last three years.

“As the tide goes out it will leave some retailers exposed to traditional business models that are no longer fit for purpose in today’s digitally-driven consumer environment.

“Retailers will have to evolve rapidly to stay relevant to consumers and economically viable.”