Insolvency figures in retail have taken a nosedive, and it is now one of the worst-performing business sectors.
According to the latest analysis of corporate insolvency numbers from PricewaterhouseCoopers, the retail industry is significantly worse off than this time last year. There was a 10.3% increase in insolvencies in the second quarter of 2012 over the same quarter of last year – 426 compared to 386.
Overall, though, fewer businesses have struggled. There were 3,927 corporate insolvencies across all sectors in the second quarter, the number being 11% down on the first quarter of 2012 and 3% down on the same quarter in 2011.
Mike Jervis, PwC business recovery partner and retail specialist, said that retail stood out amongst the latest figures.
“There’s been a clear reduction in the incidence of insolvencies over the current recession compared to previous ones,” he said. “Retail is the sector which keeps bucking this trend. In fact, quarter on quarter retail insolvencies have increased for every one of the last four quarters.”
He said other sectors which were showing this trend, such as construction and hospitality & leisure, had had fewer insolvencies during the second quarter of 2012 than the same period last year.
“The high street environment continues to be challenging,” he went on, “and quarter 2 has seen Clintons, Game and Julian Graves go into administration.”
The worst affected sectors, according to PwC, continue to include construction (644 companies becoming insolvent, manufacturing (427), retail (426), hospitality & leisure (332) and real estate (169).
Regionally, London has the highest number of insolvencies, although they are falling, and the north east/Cumbria had the biggest increase year on year. The biggest reduction in insolvencies year on year was in the west.