According to research by the business advisory firm, Delloitte, the retail sector has seen a significant drop in companies going into administration. The information showed that only 119 retailers went under in 2014 compared to the previous year, which saw 183 – a fall of 35 per cent.
Generally, across all sectors, administration dropped by 20%, with 1,302 businesses entering administration. Broken down by regions, it shows that half of the total administrations came from London with 328 and the North West at 280.
Only the IT and financial services sectors saw increases in administrations during 2014, at 14 per cent and 2.5 per cent respectively.
Restructuring services partner at Deloitte, Lee Manning said: “After a few turbulent years, we saw fewer casualties in the retail sector in 2014. As the economic situation improved, consumer confidence increased and the retail industry benefited”.
Mr Manning goes on to say that the hospitality and leisure sectors were showing encouragement, with a total decrease of 34%.
He also advises that there has been a shift away using administration towards other methods of restructuring.
Businesses have started to use “debtor driven solutions” which entail negotiation with creditors, either through informal methods or using CVA’s.
Story: Chris Grigorovsky
