Insolvencies are on the rise, leaving retailers in an even greater vulnerable position. Despite economic upturns, such as fading inflation and accelerating wage growth, low consumer confidence is still dragging down profits. As a result, British businesses are struggling to stay afloat.
With high street prospects at risk, business specialists Alvarez and Marsal have called it a “make or break moment” for retailers. A long list of high street households names has already fallen into administration, such as Poundworld and Toys R Us, while House of Fraser, New Look, Mothercare and Carpetright have implemented life-saving Company Voluntary Arrangements (CVA).
Refocusing on cash flow and scrutinising finances is essential if retailers and restaurant owners want to protect themselves from insolvency. At the Credit Protection Association, our debt recovery services free up cash flow, while our credit checks, status reports and company directories purge finances and ensure our Members are not left at the mercy of an insolvency practitioner.
Richard Fleming, Alvarez & Marsal’s top restructuring adviser in Europe estimated that Britain will see a 15 per cent increase in insolvencies this year. The former KPMG executive added that the crisis in retail will continue but casual dining, healthcare and industrials are also facing pressures.
“The first critical factor driving this is a weakening in consumer confidence, which will accelerate over the coming months as household debt starts to bite,” he said. “The second is upward pressure on wages.”
