Retail was one of the hardest hit sectors in the first quarter of 2013 with the number of insolvencies rising 1.75% to 407 despite a 10.2% drop across the UK.

Administrations across the UK fell to their lowest levels since 2005 with 490 firms hitting the buffers, according to PwC.

However, major retail chains including entertainment specialist HMV, fashion retailer Republic and DVD rental chain Blockbuster plunged into administration in the first quarter.

The statistics suggest that business conditions are generally improving but reflect the difficulties being faced by a retail sector failing to follow the overall downward trend, according to the accountancy firm.

PwC partner and retail expert Mike Jervis said: “Administrations have dropped below the 500 barrier for the first time since 2005, alongside other insolvency processes. Perhaps this is an early sign of confidence returning and also maybe a sign of some economic recovery.”

CVAs across the UK plummeted 41.9% year on year to 104.

Jervis said: “CVAs have dropped to a level never seen before. This type of insolvency appears to have become less popular because many CVAs fail if they don’t address the fundamental viability of the underlying businesses, and instead simply focus, say, on store closures.”