UK: High street insolvencies shoot up over Q1
The number of high street stores entering administration shot up over the first quarter of this year, according to statistics from the Insolvency Service.
The high street experienced a 180% increase in insolvencies, with 24 appointments in the fourth quarter of last year against 67 in the first quarter of this year, said consultancy firm KPMG on Friday (4 May).
The manufacturing sector saw a 34% increase in administration appointments to reach 102 in the first quarter of this year. However, the number of companies entering insolvency proceedings fell against the first quarter of 2011, when 119 companies went into administration.
"Today's figures are the culmination of a barrage of negative economic pressures thrown at the high street in the past few years," said Richard Fleming, KPMG UK head of restructuring.
"There was a wave of high profile retail administration appointments in the first days of 2012 - not least Peacocks, La Senza and Blacks - and the latest statistics from the Insolvency Service show that the New Year pain extended beyond a small number of well known brands".
"An industry sector-by-sector analysis shows that administration appointment figures were either flat on the previous quarter or indeed, in the case of the transport and hotel industries, fell considerably.
"However, the spike in retail insolvencies drove an overall increase in administration appointments of around a fifth.
"Unfortunately we do not think today's data is evidence of the traditional seasonal increase in retail failures. Our own pipeline of work suggests the high street and the many companies which service the retail industry are running out of options, with administration - the option of last resort - now inevitable for some."
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