Fashion retailers facing financial distress

Blog Insolvency

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Recent research suggests that high street fashion retailers are increasingly edging into financial distress.

According to figures published in February, 19 per cent of UK clothing retailers are currently at risk insolvency.

Of a total of 35,078 clothing retailers assessed as part of the comprehensive survey, as many as 6,580 said that their organisation was showing early signs of ‘financial distress’ – the majority of whom claim that recent falls in consumer spending have hit their business hard.

This echoes the findings of separate research published by retail expert Springboard, which recently found that footfall at high street retail outlets had fallen by 1.6 per cent in January – while actual customer numbers had fallen by 1.9 per cent.

During the same month, consumer spending was down by 1.2 per cent – the first January fall on record in five years, the figures revealed.

Meanwhile, spending at high street stores was down by four per cent.

Commentators have suggested that rising inflation coupled with rumours of further interest rate increases on the horizon for later this year have had a negative impact on consumer spending and confidence in recent months.

On top of this, reduced footfall at high street retail outlets has had an adverse effect on the income of a number of prominent high street names.

Earlier this year, furniture retailer Warren Evans fell into administration, as did fashion outlet East.

More recently, high street restaurants have been feeling the strain, too, with Italian restaurant chain Prezzo announcing earlier this week that several of its eateries all across the country will close.

If your business runs the risk of administration, speak to Gibson Hewitt. Contact our Business Recovery department today.