Retail chains risk going bust in January

Dec 22 2008 by Graeme King, The Journal

MORE than 10 national or regional retail chains risk going bust next month, insolvency experts are warning.

A partner at national firm Begbies Traynor believes the nation’s high streets are seeing such hard times this Christmas, many will not survive far into the 2009. The claims come as research from accountants PricewaterhouseCoopers suggests that 82% of retailers have been discounting their merchandise over the last two days.

The figures were compiled from Oxford Street in London, where many of the country’s top retailers have stores. One month ago, only 52% of them were cutting prices.

In a BBC radio interview Nick Hood from Begbies said: “The problem facing the management of retail chains is whether they can find funding to restock in January, pay their VAT bills and survive through until Christmas starts again next October.”

The danger facing them is that banks and suppliers that might have been prepared to support retailers during Christmas trading, may be unwilling to do so afterwards. Retailers are vulnerable in January because they have more cash and less stock, so if creditors are going to force them into administration it is the best time to do so.