The latest retail sector news offers little hope that the New Year might see an upturn in fortunes on the high street. Movehut has already reported a rash of poor Christmas trading figures and with unemployment continuing to rise, there appears to be little chance of consumer confidence improving in the short term. To make matters worse the past week has seen a number of retailers going into administration leading to further job losses and the closure of yet more commercial properties.
The latest retailer to call in the administrators is children’s clothing chain Pumpkin Patch. This follows earlier announcements from familiar high street names Peacocks, Past Times and Barratts. So what are the consequences and what might the future hold for these troubled retailers?
Pumpkin Patch opened its first UK store in 2000 and currently has 36 commercial properties employing 400 staff. The administrators Deloitte plan to keep the majority of these trading in the short term while they explore the options open to them.
However it has been announced that six branches have already closed including outlets in Cambridge, Leeds and at the Cheshire Oaks commercial property development. A spokesman for Deloitte promises they will seek to preserve jobs and meet retain value for creditors.
Clothing store Peacocks went into administration with debts of £240 million earlier in the week. Peacocks has over 500 commercial property branches employing around 9,000 people across the UK. Once again, the administrators KPMG say that the sores will continue trading while they seek a buyer for the chain. Despite this assurance nearly 250 staff have been made redundant at the group’s Cardiff headquarters.
Meanwhile, Bon Marche, which is part of the Peacock Group, has not yet entered administration but has announced its intention to do so next week. Bon Marche has nearly 400 retail commercial properties, the future of which is now in doubt along with those of its parent company.
Gift shop Past Times has already closed 46 branches with the loss of around 500 jobs. The future of a further 500 staff at the remaining 51 commercial properties hangs in the balance while administrators, once again, assess the options. In a statement they blame difficult trading conditions and a decline in consumer confidence for the chain’s losses.
There is however, better news for shoe chain Barratts after a management buy-out secured the future of 89 of its threatened stores. But another 50 will close with the loss of nearly 700 jobs. This is on top of the 1,600 jobs already lost when 100 commercial properties were closed after an earlier failure to find a buyer. Chief Executive, Michael Ziff said: “I am delighted that we have been able to conclude this deal and save as many jobs as we have. The last few months have been very challenging but we have a great team in place.” He now plans to move the company upmarket and concentrate on developing Barratts online. “I don’t think we need lots of shops,” he added.
The news of so many familiar names going into administration so early in the year is bad news for jobs and its bad news for the high street. A number of recent reports have highlighted the high commercial property vacancy rates in many towns and cities and proposed a range of measures to address the situation. This week’s news suggests these should be acted on sooner rather than later.
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