Almost a third of the UK's retailers are at risk of insolvency in the next year, according to recent research.

According to insolvency firm R3, some 31% of UK retailers have a higher than normal risk of entering an insolvency procedure in the next 12 months. By comparison, 25% of all UK businesses have the same risk of failure.

"High street retailers have had a tougher time of it than other sectors in the past few years," said R3 president Liz Bingham.

"Now, after dealing with recession, a sluggish recovery, and changing consumer habits, traditional retailers will be put under more pressure as they are exposed to the stresses of expansion as economic recovery picks up," 

"Insolvency isn't the end of the road for a retailer though. It can be an opportunity to restructure and rethink the business model. Many retailers have come out of administration and gone from strength to strength."

There is often a spike in insolvencies around quarterly rent day, because retailers will delay insolvency procedures until after rent is due, thanks to the complex rules on administration costs that have developed in recent years, R3 said.

"As a result of a series of court decisions, there are certain costs that have to be paid by businesses in administration before money can be given back to creditors; rent is one of these payments," noted Bingham.

"By delaying administration until after rent is due, unpaid rent becomes just another debt to be repaid to creditors, with no special priority. This could see a retailer rescued rather than dissolved, but, as a whole, the rules are a mess. They are a bad deal for landlords, retailers, and employees. Clarification from government is needed."

According to R3's most recent Business Distress Index, 42% of retailers were experiencing signs of financial distress, compared to 35% of all UK businesses.