Retailers face quarter day tension – BDO
TENSION amongst the region’s retailers will intensify this week as firms prepare for quarter day rental payments for the last time before Christmas.
According to a business restructuring expert at accountancy and business advisory firm BDO in Birmingham, the quarter day – when many retailers pay three months’ rent in advance to landlords – remains a real issue in the current climate and is often the tipping point for insolvency.
Previous quarter days have seen the likes of Habitat, Jane Norman and TJ Hughes enter administration.
But BDO partner Phil Emmerson expects to see less High Street bloodshed on the Autumn quarter day, which lands this Saturday.
He said: “While some retailers have moved to monthly payments, the quarter day still remains a hurdle for many companies’ cash flow.
“Retailers have had another tough and testing year and Q4 sales and the January sales are critical for the vast majority. They have a hard task in finding ways to encourage people to spend money with them rather than their rivals, and this comes down to offering them what they want, new products and value underpinned by superior service.”
But he points out that landlords are suffering too and with rising vacancies and a rush of lease expiries imminent over the next two years, they need to keep hold of their tenants. Emmerson suggests the last thing the sector needs is another round of high profile CVAs and administrations.
“Both tenants and landlords will be keen to make the most of the lucrative run up to Christmas and convert stock into cash, in the hope that even the most cash-strapped of consumers will be hitting the shops,” he said.
