Analysis of major retail insolvencies since 2011 reveals that 53% of jobs are preserved during the insolvency process, while 48% of stores survive.
Insolvency trade body R3 has been tracking the survival rate of jobs and stores over the last 18 months for major retailers including those with stores in Southampton such as La Senza, Clinton Cards, Peacocks, Jane Norman, Past Times, Game, Blacks and Hawkins Bazaar.
In the case of La Senza, whose store in WestQuay remains open, 1,300 jobs were preserved nationally.
Nick Keitley, Chairman of R3’s Southern Committee and Partner at Bond Pearce in Southampton, comments:
“These figures show that the insolvency process, whilst never good news, can result in significant parts of the business surviving. The fact that over 50% of jobs remain intact is positive given the trouble a business is likely to be in at the start of insolvency – by definition unable to pay debts as they fall due.
“Much of the retail sector needs to change its methods of meeting customer expectations or face extinction. Store portfolios are simply too large at present, so shedding some unprofitable stores is part of this evolution.”
Nick Keitley concludes: “The UK’s insolvency regime has improved since the introduction of the Enterprise Act in 2002, with a greater flexibility introduced for the administration process, which has enabled more jobs and businesses to be saved.”