Retail insolvencies rise again
Published: 09 May, 2011
The latest statistics from the Insolvency Service have shown a substantial rise in the number of retail CVAs and administrations for the first quarter of 2011
The quarter saw 124 administrations in retail, up from 80 in the previous quarter and CVAs in the sector rose from 23 to 30.
Brian Green, restructuring partner at KPMG, said: “The recession this time around has been different to those which have gone before in that the severe crash, typical of an economic downturn, was cushioned. While it has been shown that an economic fall can be cushioned, the financial problems still need to be resolved and it now feels like we are reaching the end of the insolvency hiatus and activity is increasing.”
And Lee Manning, reorganisation services partner at Deloitte, said: “It comes as no surprise that the retail sector has been worst affected. The sector is heavily reliant on buoyant consumer spending and the increase in VAT and the Government’s austerity measures are undoubtedly hitting the sector hard.”
Barry Knight, head of retail at Grant Thornton added: "The high street has been struggling over the last few months with many retailers reporting some of their worst months on record. The pressures from high inflation – particularly in relation to commodity prices – and the rise in VAT and National Insurance contributions, have come through with full force this quarter and finally started to affect consumer spending, with retailers suffering as a result.”
