168 Yorkshire businesses entered administration last year
The number of Yorkshire businesses entering into administration rose by 11% in 2018 to 168, according to Deloitte’s latest insolvency figures.
The second half of the year saw the steepest rise in administrations across Yorkshire and The Humber, with 88 companies appointing administrators – a 29% increase on the last six months of 2017.
In contrast, the first six months of 2018 showed a slight decline in administration appointments versus the same period in 2017 – down from 83 to 80.
Among the high-profile businesses entering administration in the region were Poundworld, Crawshaw Group and Maplin.
Clare Boardman, Deloitte’s head of restructuring services in the Yorkshire and the North East, said: “It has been a tough year for businesses across a range of sectors.
“Retail and casual dining have been the hardest hit sectors over the past year, both in our region and nationally, with some high-profile casualties and a continued deterioration of trading conditions during the year. They have faced additional cost pressures due to a weaker sterling, business rate increases and the drop in consumer confidence.
“The rapid decline in the performance of the high street has driven bricks and mortar retailers to increase their levels of discounting to counter the drop in footfall, but the squeeze on margins has left many of them burdened with loss-making stores. For some of those businesses, that downward spiral has pushed them towards either administration or a CVA. We expect a particularly challenging first quarter in 2019 for many retailers as the full effect of Christmas trading becomes clear.
“But retailers and casual dining outlets in Yorkshire are not the only businesses that have found it difficult.
“Factors such as wage inflation (due to both the Minimum/Living wage and a shortage in supply in certain areas), reductions in consumer spending and continued uncertainty over Brexit (which impacts investment decisions) have impacted sectors such as healthcare and social services, construction and hospitality across our region. In all those sectors, the number of business failures rose significantly in 2018.”
Deloitte’s research shows that across all industry sectors, including retail, the total number of administrations in England and Wales increased by 10% from 1,134 companies in 2017 to 1,251 in 2018.
The majority of sectors reported an increase in administrations between 2017 and 2018, with the only sectors reporting a reduction being printing and publishing (-21%) and recruitment and business services (-10%, albeit the third largest contributor with 198 appointments).
2018 witnessed an 18% growth in CVAs (Company Voluntary Arrangements) across all industry sectors, including retail, rising from 334 to 395. CVAs in relation to bars, hotels and restaurants, for example, increased by four times last year to 36.
