Member Article

First quarter shows levels of Yorkshire retailers at risk remains high

With struggles on the high street making the headlines in recent months, it’s no surprise that the latest research from insolvency and restructuring trade body R3 shows that in the first quarter of 2019 there was little improvement in the level of bricks-and-mortar shops at higher than normal risk of insolvency in Yorkshire and the Humber. In March 2019, the regional level was 44.2%, little changed from 44.3% in September 2018.

Once again, the national picture was slightly better than the regional one with 41.9% of physical stores across the UK at elevated risk of insolvency, compared with 42% in September 2018.

In March 2019, over 4,500 of the over 10,200 physical stores in Yorkshire and the Humber were at higher than normal risk of insolvency. While across the UK, 60,300 of the nearly 143,800 active retail businesses with a real-world presence were deemed to be at elevated risk.

Looking at the breakdown of different types of shops in the region, home furnishings stores put in the poorest performance, with 45.1% in the elevated risk bracket, followed by book shops (41.1%), clothes stores (40.4%) and motor retailers (40.4%).

Of the 12 UK regions surveyed, London once again put in the strongest performance, with 37.9% of bricks-and-mortar shops at above normal risk, followed by East of England (40.2%), the North West (40.6%) and Northern Ireland (40.9%). In contrast, the South East had the highest proportion of physical retailers at risk with 46.1%, followed by the South West (45.9%) and Wales (45.5%).

Eleanor Temple, chair of R3 in Yorkshire and a barrister at Kings Chambers in Leeds, said: “Although distress in the sector appears to have plateaued, it has been a dismal start to the year on the high street with a large number of high profile retailers facing troubles.

“While physical stores are obviously suffering from strong web-based competition, it’s interesting to see that even online retail is relatively subdued with 36.1% of online retailers in the UK deemed to be at higher than normal risk of insolvency. The likelihood is that shops are suffering from pressure on consumer spending as issues around Brexit continue to dampen confidence.”

Ms Temple continues: “With the March quarterly rent day now behind them, it is hoped that the resilience of retail businesses still trading will see them through, although the uncertainty around the UK’s withdrawal from the EU shows little sign of easing shoppers’ woes. If your business is showing any signs of financial distress, it is vital to seek advice from a qualified professional as soon as possible when the most tools will be available to help you.”

This was posted in Bdaily's Members' News section by Emma Kilmurray .