Retail firms 'at risk of failure'

empty shops

More than 20,000 independent retail firms are at risk of failure in Britain's flagging high streets, a report is expected to warn this week.

The alternative review into the high street by Bill Grimsey, the former chief executive of Wickes and Iceland, will reportedly lay bare a "deep decline" across many retail centres in the UK.
Mr Grimsey's self-funded report - due to be presented at a House of Commons reception on Wednesday - is set to call for a minister for high streets and say that town retail centres will need to incorporate education, arts, residential, leisure and technology facilities as part of a major overhaul.

It is understood Mr Grimsey will warn that 47% of retail firms are in financial difficulty and around a quarter of those are likely to fail in the next three years, also putting strain on their suppliers.
Previous reviews such as the government-commissioned review by retail guru Mary Portas to revive struggling high streets are too "nostalgic", he will reportedly say.

Writing in The Sunday Telegraph, Mr Grimsey said: "It simply isn't good enough to just wring our hands and reminisce about the good old days on the high street."

Ms Portas will appear before the Communities and Local Government select committee tomorrow to discuss her review, which was completed more than 18 months ago and included recommendations such as setting up 27 "Portas Pilots" that shared £2.3 million of funding.

A £10 million High Street Innovation Fund was also set up to help councils with the highest incidence of empty properties and those most affected by the 2011 riots.

But Mr Grimsey has been a vocal critic of the Portas Review, saying earlier this summer it is just " fiddling in the margins"

"We need to get serious about the high street and look at a complete solution to the challenges it faces," he said at the time.

A Communities and Local Government spokesman said: "Although we have not seen the report we welcome contributions to the debate on the future of high streets.

"This Government has already put in place a wide range of measures to help towns manage the change in their high streets - we have lifted planning restrictions to bring more housing to the high street, cut business rates for thousands of small businesses and scrapped Whitehall guidance that pushed for higher parking charges."

Communities Secretary Eric Pickles also announced that experts will train and mentor leaders of 350 "town teams" across the country - set up in the wake of the Portas Review - on ways to adapt high streets to changing consumer behaviour.

Workshops will be provided by advisers from organisations such as the Association of Town and City Management, Centre for Local Economic Strategies and Business in the Community.

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Retail firms 'at risk of failure'

Administrators sounded the death knell for Woolworths in December 2008, leading to store closures that left 27,000 people out of work. Since its collapse former Woolworths stores have become a blight in many town centres and more than 100 of the large stores still lay vacant in January 2012.

Loyal customers didn't have go without the family favourite store for long however as it reappeared online as in 2009, after Shop Direct Home Shopping bought out the Woolworths name.

The greetings cards specialist became the latest highstreet casualty in May with 8,000 jobs on the line when it was forced it into administration. Its biggest supplier, American Greetings, then bought Clintons out of administration and put the retailer through a rebrand including a new logo and complete in-store revamps.

Its contemporary format includes new fixtures and fittings and easier to navigate stores, and will be rolled out to all 400 UK stores at the cost of £16million. Bosses aim to bring the brand back to profit within two years.

Poor sales in the run up to Christmas was the final nail in the coffin for several struggling chains, including lingerie retailer La Senza, which went bust in January 2012 with 146 shops and 2,600 staff. Kuwaiti retailer Alshaya bought part of the business, which saved 60 shops and 1,000 staff.

La Senza has been struggling in a similar way to other specialist shops such as Game and Mothercare, which have been hit by cut-price competition at supermarkets and have no alternative products to help shoulder losses.

Stricken retailer Blacks Leisure, which employed 3,600 staff across 98 Blacks stores and 208 Millets stores, went into administration in Janurary 2012 after failing to find an outright buyer.

Soon after its stores were bought by sportswear firm JD Sports in pre-pack deal - an insolvency procedure which sees a company being sold immediately after it has entered administration – which saw most of Blacks' £36 million of debt wiped out.

Fashion chain Bonmarche, which was part of the Peacock Group, was sold in January when the group collapsed due to unsustainable debts, resulting in 1,400 job losses and 160 store closures. Private equity firm Sun European Partners bought 230 stores, which continue to trade with 2,400 staff.

Peacocks collapsed under a £740 million net debt mountain in January 2012 in the biggest retail failure since Woolworths. Despite being sold out of administration to Edinburgh Woollen Mill in a deal that saved 380 stores and 6,000 jobs, administrators from KPMG were forced to close 224 stores with immediate effect. This lead to 3,350 redundancies from stores and Peacocks head office in Cardiff.

The high street name continues trading as bosses work to stabilise the situation, yet a further blow was dealt this month with news that the firm's pension fund is in £15.8 million shortfall as a result of the collapse.

Game buckled under its £85m debt pile in March 2012 and was placed into administration after being unable to pay a £21m rent bill. Administrator PwC immediately closed 277 shops, with the loss of 2,000 jobs. Soon after, investment firm, OpCapita bought 333 Game stores, saving more than 3,000 jobs.

Game's demise followed a string of profit warnings and the failure of nervous suppliers, including leading names Electronic Arts and Nintendo, to go on providing the latest games, further damaging poor sales.

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