Behind every shuttered shop lies opportunity, if you know where to look. With consumer confidence faltering and operating costs rising, the UK retail sector is increasingly unable to absorb further shocks. 

Key Takeaways

• Semi-urban and town centres’ high streets are collapsing, and would need a capital of £5bn to be saved
• Rising inflation and the country’s shrinking economy is pushing more and more retail stores to the brink of bankruptcy or insolvency
• River Island’s restructuring may go south, and result in 2000 job losses before the end of August

Stay ahead of the curve by accessing real-time insolvency data with an Administration List subscription.

The Downfall of UK’s High Streets & Mounting Insolvency Pressure on Retail 

Just last week, research from the Centre of Cities presented some worrying statistics about the state of retail stores on the country’s high streets. Semi-urban and struggling areas like Bradford, Newport and Blackpool now have double the proportion of empty shops compared to London. These high street closures are a clear sign of deeper economic fragility in town and city centres.

Despite repeated calls from retailers to cut business rates, reduce employment taxes, and ease parking costs, the problems run deeper than policy tweaks. Many high streets, especially in lower-income areas, are oversupplied with retail space and undersupplied with spending power. In affluent cities like York, Edinburgh and London, where dining, leisure and tourism help fill the gap left by declining footfall, vacancy rates remain low. But in economically weaker towns, the absence of local disposable income has left high streets hollowed out. A capital as high as £5bn is needed to revive the retailers int these areas.

This geographical divergence is critical for investors tracking distress in the retail sector. Areas with high vacancy rates and low foot traffic are more likely to see retail insolvencies, presenting both risks and potential turnaround opportunities for distressed busines buyers.

Inflation + Wobbling Consumer Spending = Higher Chances of Insolvency

The UK economy shrank for the second consecutive month in July 2025, and consumer confidence took another hit. New data from the British Retail Consortium (BRC) reveals that expectations for the economy and personal finances have worsened, driven by inflation, rising living costs, and higher food prices.

Yet, despite these headwinds, retail spending hasn’t collapsed—at least not yet. BRC data shows a modest rise in shoppers’ spending expectations, likely in anticipation of higher prices at the till. However, this uptick masks the strain many retailers are under. Employment costs have surged following the Chancellor’s last Budget, with increases to both the National Living Wage and Employer National Insurance Contributions. These tax hikes have added significant pressure to retail margins and will likely drive further retail inflation if not reversed.

Insolvencies in the sector are already showing signs of escalation. Retailers unable to absorb the rising cost base or adapt quickly to shifting consumer behaviour, particularly those without a strong online presence are increasingly vulnerable to falling into critical financial distress. 

200+ Liquidations Recorded in July

The current insolvency climate in UK retail also highlights systemic risks: a fragile consumer base, volatile pricing, and overexposure to brick-and-mortar. Our platform has already recorded 346 retail insolvencies in July, 250 of which were liquidations, the most severe form of insolvency. Unlike administrations, which aim to rescue a business or sell it as a going concern, liquidations signal a full shutdown.

These numbers also suggest that margins are too thin, consumer demand too fragile, and funding too hard to secure. For investors, this presents both risk and urgency: while competition for high-quality turnaround opportunities is heating up, the window to act is narrow.

Retailers with no digital strategy, heavy rent obligations, or outdated models are most at risk. But for investors prepared to move quickly, leverage non-bank financing, or reposition a brand, this landscape could be rich with long-term value. Track retail liquidations in real-time at Administration List and gain first-mover advantage in one of the UK’s hardest-hit sectors.

News About Latest Retail Insolvencies

River Island Restructuring Update: Without urgent approval of its restructuring plan, the high street fashion chain could face administration by the end of August.

The company has asked landlords to back a sweeping turnaround proposal that includes closing 33 stores and significantly reducing rent payments across its retail estate. In newly released restructuring documents, River Island made clear that it requires £10 million in fresh funding by early September to stay afloat. This may rise to as much as £50 million by year-end if trading conditions remain tough.

If the plan is rejected, the retailer says it will run out of cash and be “unable to pay its debts as they fall due”, triggering a likely insolvency process. The court hearing and creditor vote are expected in the coming weeks.

With more shoppers going online and footfall in key town centres declining, the chain admits it’s left with “an oversized and outdated store portfolio” no longer aligned with demand. These pressures were reflected in its most recent accounts: River Island posted a £33.2 million loss in 2023, a sharp reversal from its £2 million profit the year before. Sales fell over 19% to £578.1 million, while costs continued to climb. The group has already begun a cost-cutting programme that includes head office redundancies, particularly within its buying and merchandising teams. If the restructuring plan fails, the company’s insolvency could mean more than 2,000 jobs lost before the end of August. 

SkateHut’s Acquisition after Administration: Danish action sports retailer SkatePro has acquired the business and assets of Skate Hut, a UK-based online retailer of skateboards, scooters, skates, and bikes, following its collapse into administration.

Headquartered in the West Midlands, Skate Hut was primarily an e-commerce brand with a strong domestic presence and international reach, supported by two physical stores in the UK. The company enjoyed a surge in demand during the COVID-19 lockdown period, recording peak revenues of £32.2 million and pre-tax profits of £2.6 million for the year ending March 2021. However, as consumer spending patterns normalised, revenues fell dramatically to just £14.1 million by March 2024, with losses of nearly £975,000.

Facing mounting cash flow pressures, Skate Hut approached the restructuring team at Bishop Fleming in May 2025. Following a rapid review of options, the company opted for an accelerated administration sale to safeguard the business and protect jobs.

Although a creditor’s winding-up petition added complexity to the process, a court-approved administration allowed the transaction to proceed. Skate Hut and its parent company, Splat Holdings, were both placed into administration shortly before the sale was finalised. The deal was completed for an undisclosed sum.

Read more about how to successfully turn around a struggling business

What to read next:

• Due diligence guide
• Funding acquisitions
• Buying businesses with existing employees
• Minimising risk in insolvency acquisitions

External Sources:

• The Guardian
• British Retail Consortium