Insolvency body R3 expects more major retail failures
MORE high profile retail names are likely to fail in the next few months, acccordign to R3, the industry body for the insolvency profession.
The last week as seen a number of High Street names either appoint administrators or close scores of stores. Among these are Manchester kitchens bedrooms and bathroom chain Homeform, along with Habitat, Jane Norman, Thorntons and Carpetright.
Jeremy Oddie, R3 regional chair in the North West and head of insolvency at accountants Mitchell Charlesworth, said: “The retail crisis has been worse than expected but it is by no means over yet. The latest victims are long-established high names which you might have imagined would be too big to fail.
“The retail economy appears to be in recession – consumers are running out of money and have changed their spending habits.
“These latest collapses will have knock-on effects throughout the economy – on the public purse, given that large amounts of tax that will be owing, and on suppliers, sub-contractors and staff. Unfortunately I believe this is just the end of the beginning and we are likely to see some more big names fail before the worst is over.”
Recent R3 research showed that over half (56%) of people in the North West are buying fewer non-essentials such as clothes and DVDs while a similar amount (51%) say that they now shop around before buying goods.
One in three (32%) admits they have switched to a less expensive supermarket or shop while one in four (23%) has started to buy non-essentials from supermarkets instead of specialist retail chains.
Meanwhile 38% have switched from premium brands to ‘own brands’ or ‘value brands’ while a similar proportion have used more vouchers. However only 22% of North West consumers said they now set a budget to control their spending.
