Midlands retail administrations down 9% year on year
RESEARCH from advisory and accountancy group Deloitte has revealed there were 183 retail administration in 2013 – down 6% on 2012.
The situation in the Midlands is even better with a 9% decrease in retail businesses failing on a year-on-year basis.
However, nationally there was an increase of 11% in the last three months of the year compared to the fourth quarter of 2012 (41 vs. 37).
Dominic Wong, restructuring services partner at Deloitte in Birmingham, said: “The High Street has undergone a re-balancing, and this is what is being reflected by these figures. A year ago we were about to see HMV, Blockbuster and Jessops enter administration, but I would not expect as many high profile retail casualties this time round.
“This does not mean demand is increasing, more that the clear out will benefit those still standing in 2014.
“Christmas trading appears to have been reasonable, though not spectacular as customers opted to stay away from the High Street in favour of click and collect. It is essential that retailers address the fundamental issues affecting the industry. 2014 is likely to be marked by further closure programmes, both within and outside of formal insolvency processes.”
It has been a mixed week for retailers. John Lewis – which has a store in Solihull and is building another one as part of the Grand Central scheme at Birmingham’s New Street station – said that like-for-like sales rose by 6.9% to £734m in the five weeks to December 28.
And managing director Andy Street – chairman of the Greater Birmingham and Solihull Local Enterprise Partnership – said the retailer is planning to almost double in size over the next decade as part of ambitious growth plans that will see it increase the number of its stores to around 65 by 2030 from 40 currently.
Street forecast the expansion in size would lead to an increase in annual revenues from approximately £4bn today to £7bn.
By way of contrast, rival Debenhams – which has stores locally at Birmingham’s Bullring, Walsall, Lichfield, Worcester, Stratford, Coventry, Leamington, Nuneaton and Merry Hill – issued a profits warning due to poor Christmas trading.
This led to the resignation of its finance director Simon Herrick.
