Almost a third of Midland retailers are at risk of failure following the latest Rent Quarter Day, a new survey reveals.
A disturbing 30 per cent of Midland retailers could face financial collapse in the next 12 months, according to insolvency trade body R3.
With the passing this week of the latest Rent Quarter Day, research from R3 has revealed more doom and gloom around the corner on the High Street.
The figure compares to a figure of around one in four (23 per cent for the East Midlands and 25 per cent for the West Midlands) for businesses across the region.
R3 Midlands Chairman Richard Philpott, a partner at KPMG in the region, said: We often see a spike in retail insolvencies shortly after the traditional Rent Quarter Day because of the added squeeze on cash flow, and also because of complex rules on administration expenses that incentivise retailers to wait for Quarter Day to pass before going into administration.
“Amongst the worst affected are High Street retailers, who have had to cope with adapting to new online retail channels as well as the recession and a sluggish recovery.”
Mr Philpott advised that for those retailers still struggling with this month’s Quarter Day payment, which was due on 29th September, negotiating with the landlord could be key to staving off insolvency.
“If you are in financial difficulty don’t stick your head in the sand. Talk to your landlord and, if necessary, take advice from a professional. Turnover-linked rents or frequent, smaller rent payments could be options to facilitate cash flow. There are also several other options available, depending on the level of support required.
“Insolvency isn’t necessarily the end of the road for the retailer – it can be an opportunity to restructure and rethink the business model, and many retailers have come out of administration and gone from strength to strength.”