The number of retailers that slipped into administration declined during the first quarter of the year, despite turbulent trading conditions.
According to KPMG, 28 retailers across England and Wales went into administration during the first three months of 2017 as the industry faces a perfect storm of rising cost pressures from the increase in the national living wage, climbing business rates, the implementation of the apprenticeship levy and currency headwinds.
The figure marked a slight improvement on the 30 retailers who called in administrators during the same period a year ago.
But while the number of retail insolvencies fell, the number of companies across all sectors going into administration increased year-on-year.
KPMG analysis of notices in the London Gazette revealed that 297 businesses in England and Wales went into administration in the first quarter of this year, compared to 277 during the same three-month period in 2016.
High street names including Jaeger, Jones Bootmaker, Brantano and Agent Provocateur were among the retail casualties between January and March as retailers grappled with the relentless trading environment.
A ‘cocktail of factors’
KPMG head of restructuring Blair Nimmo said England and Wales had been “business as usual” in terms of the level of insolvencies but warned there could be more to come for high street chains later in the year.
“The high-profile administrations of numerous retailers seen during the first quarter of the year are good examples of how those consumer-facing businesses which are having to contend with fragile consumer confidence and rising raw material costs are coming under a degree of stress,” Nimmo said.
“There is currently a cocktail of factors causing headaches for consumer-facing businesses. Rising prices and lacklustre wage growth, coupled with high levels of household debt, is dampening consumer desire to spend.
“Simultaneously, the impact of higher import costs, the new national living wage and business rate rises are only serving to compound the squeeze.
“I therefore wouldn’t be surprised to see few more casualties on the high street over the months ahead.”