Written by: Keith Tully
Date: Thursday 13th April, 2017
A combination of economic factors are putting a significant squeeze on the finances of thousands of retailers throughout the UK.
Tax hikes, rising costs and pressures on the spending power of consumers nationwide are understood to be creating a situation in which a growing number of retailers are under threat.
According to the insolvency and business recovery experts of Begbies Traynor, there are now more than 20,000 British retailers dealing with significant levels of financial stress, with that figure apparently on the rise.
Already in 2017, several high profile and well-established high street operators have been forced into insolvency, with the fashion chain Jaeger, which was founded way back in 1884, the latest to call in administrators.
The future for close to 700 staff members at Jaeger remains unclear in the wake of the company’s entry into administration in early April and there are mounting fears that the same fate might soon befall a good many more retailers across the country.
In recent weeks the footwear company Brantano, the lingerie business Agent Provocateur and several of the 99p Stores owned by Poundland all fell into administration, with hundreds of jobs being lost as a direct result.
Reasons for the squeeze on the finances of retailers vary but the issue of business rates and the recent overhaul of the associated regime is clearly a problem for the owners of many high street stores.
The business rating system was revamped on government instruction this year for the first time since 2010 and the changes are resulting in considerably increased overheads and expenses for many thousands of businesses.
Meanwhile, fluctuations in exchange rates have resulted in rising costs for many retailers and rising inflation has left millions of their potential customers with less money to spend once their essential expenses are accounted for each month.
However, it is not only retailers who are seeing their finances squeezed, with figures from Begbies Traynor suggesting that there were as many as 276,000 UK businesses who finished last year in a position of significant financial distress.
Of those quarter million or so companies, more than 90 per cent are understood to be from within the SME sector.
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11th January 2018 An extensive audit of Apple Europe’s UK operations by HMRC has resulted in the consumer technology giant paying an extra £137 million to the British tax authorities.
10th January 2018 The total number of retail businesses which entered into administration over the course of 2017 was 28 per cent higher than during the previous 12 months.
8th January 2018 Tens of thousands of companies across the UK could soon find themselves having to pay VAT amounts upfront to HMRC on a routine basis.
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