More retailers face administration – R3

MORE high street retailers are set to fail according to new research by insolvency profession trade body R3.

The warning follows a string of well known names going to the wall including Jane Norman, Habitat and TJ Hughes.

The R3 survey suggests around half of individuals across the region are buying fewer non-essentials such as clothes and DVDs.

One in four says they have switched to a less expensive supermarket or shop, while around 20% has started to buy non-essentials from supermarkets instead of specialist retail chains.

Over a third has switched from premium brands to ‘own brands’ or ‘value brands’.

Matthew Hammond, R3 Midlands chairman and a partner at PwC, said: “A vast proportion of retailers have faced an insurmountable struggle to raise the cash needed to pay their landlords this past ‘quarter day’ on June 24, the day when retail rents traditionally fall due.

“This debt has proved to be the last financial straw for many. Furthermore, new research by R3 has shown that almost nine out of 10 people in the Midlands have changed their spending habits over the last 12 months.”

He added: “Such significant changes in consumer spending are having a major effect on the structure and profitability of the retail sector.

“Taking into account the impact that this could have on the public purse, suppliers, sub-contractors and employees, the indications are that we are likely to see more high street names fail before the worst is over.”