Tuesday, 15 October 2013 11:29

'Who's Gone Bust?' report makes for sobering reading

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The Centre for Retail Research has published its latest Who's Gone Bust? report, giving an insight into how retail companies have been affected by five years of economic turbulence.

Worryingly for all involved in the sector, it appears that conditions are getting worse; 2012 saw 54 companies fail, matching the previous highest total set in 2008, and with 39 brands failing by the end of August alone, 2013 is on track to be even worse.

 

On a human scale, 2008 is still the worst year, as almost 75,000 employees were affected by company failures in the retail sector, compared with less than 50,000 in 2012 - an indication that 2008 saw several bigger brands vanish from the high street.

So, as the title asks, who has gone bust over the past few years?

The Centre for Retail Research lists:

closing down

  • Adams Childrenswear
    Alexon
    Allied Carpets
    Barratts
    Borders
    Clinton Cards
    Comet
    Dewhursts
    Ethel Austin
    Faith Shoes
    Floors-2-Go
    Focus DIY
    Game
    Habitat
    Jane Norman
    JJB Sports
    MFI
    Mosaic
    Oddbins
    Officer's Club
    Principles
    Sofa Workshop
    Stylo
    Thirst Quench
    TJ Hughes
    Virgin Megastore/Zavvi
    Viyella
    Woolworths

But xxx still exists??

Well, yes, some of the brands listed above entered administration and were sold or restructured, allowing them to survive despite the economic conditions - for example Clinton Cards, which has repositioned itself as more of a budget greetings brand.

Others have gone forever, fundamentally altering decades of shopping habits overnight, and for those born even as far back as the 1980s and earlier, brands like Comet, MFI and Woolworths had been around since childhood.

What next?

The thing most of these major insolvencies have in common is that nobody sees them coming - one day a familiar high street brand is trading as normal, the next they're having an 'everything must go' sale.

"As we all know these days, failure is often a temporary inconvenience; we are not suggesting that these businesses no longer survive," says the Centre for Retail Research in its Who's Gone Bust? report.

But it adds that 2013 "looks to be even worse" than even the worst of the years that have preceded it - which comes as sobering reading to all involved in the retail sector supply chain.

Time to act?

As long as your finances are in order, you should be reasonably well insulated against any upcoming retail shocks; however, it is important not to become complacent, even in a climate of increasing consumer sales and spending figures.

Some retailers are clearly still struggling, so be sure that you can retrieve your funds from those who owe you money.

This means carrying out regular credit checks - even on existing customers whose circumstances may have changed - and enforcing your payment terms, with prompt action to recover funds from anyone who goes overdue with good reason, and whose non-payment could be an indicator of an inability to pay, and not just an unwillingness.

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Image "borders bookshop closing down sale" by flickr user Fsse8info is licensed under CC BY 2.0