Retail has long been an important industry driving the UK economy for decades – by powering job creation and financial growth. It is also at the forefront of the sectors directly linked to consumer spending. Yet, since 2023, it has faced severe financial strain, becoming the second most distressed sector nationwide. 

The challenges span the entire UK and have hit retail, construction, and travel businesses particularly hard. These difficulties have been escalated by a wave of insolvencies driven by high inflation, falling consumer spending, and post Brexit impact in the first half of 2024. Where does this dynamic sector stand today? Let’s take a closer look and find out.

Insolvency Overview

In July 2024, business insolvencies in England and Wales exceeded 2,000, a notable rise compared to both the previous month and the same period last year, according to the latest figures from the Insolvency Service. The retail sector, second only to construction, has been particularly hard hit. In June 2024, retail sales across Great Britain dropped to £8.8 billion per week, down from £9.1 billion in May, with the fall in sales volumes between May and June at 1.2% after a 2.9% rise from April to May. 

The downturn was most noticeable in non-food stores like clothing, department stores, and furniture retailers. The majority of insolvencies involved compulsory liquidations, followed by administrations and winding up petitions, reflecting a trend of businesses opting to shut down entirely rather than enter administration.

Internet sales accounted for 27.1% of all retail sales in July 2024, with an average weekly value of £2.4 billion. Although online sales have been steadily increasing since 2006, they saw a significant spike in April 2020 due to the pandemic. Meanwhile, the Government has committed to new policies aimed at supporting SMEs, particularly in retail and hospitality. Proposed reforms to business rates and legislation to combat late payments may help improve cash flow and encourage investment, though these measures may take time to be implemented and could come too late for businesses currently struggling.

Most small retail businesses dependent on external lending have been forced to refinance, now grappling with the burden of significantly higher interest payments that will impact them for the remainder of the year. Our platform has identified 33 retail businesses entering insolvency within this month along with assets worth over millions. Find out more about their valuations, locations and how you can capitalise on these budding opportunities from our website. 

Distressed Businesses News | Carpetright Insolvency Update 

One of the UK’s largest flooring retailers, Carpetright fell into administration last month, putting over 1,800 jobs at risk.  Six years ago, it underwent insolvency proceedings and closed 81 stores after reporting a full-year loss of over £70m.

Bensons for Beds has confirmed it will be saving the Carpetright store in Belfast, but the Newtownabbey location was not included in the sites set to be taken over. Shortly after entering administration, Carpetright sold its brand, 54 stores, and two warehouses to rival company Tapi. Bensons for Beds stepped in to rescue 19 of the more than 200 remaining Carpetright stores that were slated for closure.

Carpetright has been a prominent player in the UK and Ireland since its founding in 1988, with 273 stores and 1,898 employees prior to these developments. Bensons plans to reopen the acquired stores under its own brand, offering employment opportunities to former Carpetright staff. The company has also announced its intention to expand its national store count from 162 to over 200 in the next few years. This acquisition is a strategic effort by Bensons to bolster its market presence.

Distressed Businesses News | Ted Baker to close all UK Stores

Ted Baker is reportedly planning to close all its UK stores within weeks, potentially signaling the brand’s disappearance from British high streets. The fashion chain’s UK retail arm, No Ordinary Designer Label Limited (NODL), entered administration in March, leading to the closure of 15 stores and the redundancy of around 245 employees. Staff at the remaining stores have been informed they will lose their jobs when the shops close within three weeks, although these plans are not yet finalized.

Before entering administration, Ted Baker operated 46 UK stores and employed approximately 975 people. While the US-based Authentic Brands Group, which owns Ted Baker’s intellectual property, had hoped to find a new partner to manage the brand’s retail and online business in the UK and Europe, the potential collapse of the UK stores could mark the end of Ted Baker’s presence on the high street. Despite this, the brand continues to be available through department stores like John Lewis and House of Fraser.

To learn more about distressed retail businesses, assets for sale and promising acquisition opportunities in this sector, stay tuned to Administration List. Our real time listings and growing administrator contact base can solidify your acquisition strategy. Stay informed, stay ahead.