Just one year after the collapse of Threshers owner First Quench Retailing, only a third of the stores are trading as off licences.
Of the 1,400 stores, trading under the Threshers, The Local, Wine Rack, Bottoms Up, Victoria Wine and Haddows fascias, 100 were sold on a going concern basis, 300 stores’ leases were assigned to other businesses, predominantly small off licences, and 1,000 stores were surrended to landlords.
Richard Fleming, UK head of restructuring at KPMG, said: “The outcome for the First Quench store portfolio holds a magnifying glass to the state of the British high street: only a third of the stores are now trading as off licences.
“Moreover, the stores are being operated by individual businesses or in small clusters of regional businesses; showing how the standalone off licence trade model is in decline as a big national business.
“We saw a handful of stores changed to hairdressers, convenience stores, pharmacies and even a residential property but, in the end, the majority of stores had to be surrendered to the landlords because an appropriate price could not be secured for the leasehold interests.”
He said with Christmas nearly upon us, “we are approaching the traditional squeeze point for retailers in distress as trading dips after the festive bounce”.
He added: “Retail has always seen a high volume of insolvencies and, while so far we have seen low interest rates cushion the sector from the downturn, the VAT rise in January is likely to be passed on to the customer. The effect on consumer confidence, combined with the slow post Christmas period, is likely to tip many strugglers over the edge in 2011.”