A report from research house Plimsoll highlights the fact that a record 230 UK shopfitting companies are showing signs of financial stress.

Plimsoll claims to have carried out a financial health check of the UK’s top 1,000 shopfitters, and rated them as strong, good, mediocre, caution or danger, based on their performance over the past four years.

The study identifies three stages that shopfitters are likely to pass through on the road to declining fortunes: over-trading, low profitability and, finally, high levels of debt.

Those suffering from over-trading are characterised by attempting to maintain or increase sales at the expense of margin, while investing heavily at the same time. The report says the outcome is a reduced return on investment.

Low profitability is the result of several years of over-trading, which Plimsoll believes leads to higher debt, averaging 20 per cent of turnover.

Jim Shield, marketing director at shopfitter The Sloane Group, pointed out that industry margins are likely to be affected by shifts in the prices of raw materials.

‘There have been increases in steel prices as a result of the boom in China this year. These have been double-digit in some cases, and some of the smaller players may struggle to get reliable supply,’ he said.

Plimsoll senior analyst David Pattison said that blaming the industry is no longer a valid excuse for poor performance, particularly when 382 of the companies surveyed are strong. Companies falling into this category ‘have no debt and average margins of 6 per cent’, he said.

‘Competitive behaviour is at the root of the problem. What you’ve got is a widening gap between those that are efficient, with better business models, and the others. There is also definite evidence that this is likely to continue.’

Last year’s Retail Interiors Top 100 Shopfitters table also showed an increasingly fragmented market in which the top 30 players are developing as a superleague, racing away from their lower rivals.