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Thursday, 24 April 2014

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One in three north west retailers at risk of failure

Nearly one-in-three retailers in the north west, including Cumbria, are at risk of failure within the next 12 months.

That is the view of R3, the trade body for insolvency professionals.

Its figures suggest that almost 3,500 retail businesses – or 30 per cent – are on the brink.

Jeremy Oddie, regional chair of R3 and head of recoveries at accountant Mitchell Charlesworth, said that January was a high-risk time for retailers.

He added: “R3’s figures show that – over the past two years – nearly half of all jobs and stores have been saved during major retail failures, thanks to the UK’s flexible insolvency regime. However, we do need to be honest and realistic in establishing a tipping point where resuscitation is impossible.”

Recent failures have included Comet, Jessops, HMV and Blockbuster.

Mr Oddie believes that one-in-10 retail businesses are “zombie businesses”, kept afloat only by the forbearance of their banks and low interest rates.

He said: “The big retailers we have recently seen enter administration were known to have been in a precarious situation for some time.

“The high street is having to re-define itself, and many chains have been shedding stores to create a more workable business model.

“This process could reach a natural conclusion at some point in the year ahead, although we expect a few more major insolvencies in the meantime.”

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