Retail administrations claimed 5,000 jobs last year
Nearly 5,000 people lost their jobs as a result of retail administrations last year, including Phones4U, La Senza, Jane Norman and Internacionale, a new report has revealed.
The UK’s 13 biggest high street failures led to 735 stores closing up and down the country in 2014, with half the roles put under risk ultimately being made redundant.
This was a better rate of “staff survival” than previous years however, boosted by Phones4U, where several mobile network providers swooped in to take on both stores and staff.
The last time more jobs were saved was in 2011, when 66 per cent of positions under risk were kept, the FRP Advisory report found. This dropped to 46 per cent and 48 per cent in 2012 and 2013 respectively.
Excluding Phones4U, 2014 experienced the lowest staff survival rate in four years – just 24 per cent of employees stayed in work.
It also found that “store survival” – where a premises is transferred to another retailer or brand – rose year-on-year to 42 per cent from 35 per cent in 2013. However this was still down on 2012, when 50 per cent of stores survived, and 2011, when 67 per cent of stores survived.
Without Phones4U, that also dropped to a four-year low of 33 per cent.
Glyn Mummery, partner at FRP Advisory, said the figures showed the high street had “finally turned a corner”.
“But it is still a place where only the fittest will survive and inevitably at some point in the near to medium term the benefit of a low interest rate environment will end which for several years had allowed a few retail zombies to refinance for a last lifeline."
For the first quarter of 2015, the high street also seems to be performing better, with just three retail administrations affecting 125 stores, of which 70 per cent survived.
Mummery added: “We anticipate that for the 18 months ahead as the economy continues to hold firm with consumer confidence spreading further onwards from London and the south east, there will be fewer retail failures overall but still those chains which come under cash flow pressure after years of under investment to manage through the downturn but leaving them vulnerable to sudden pick-ups in demand and strain on working capital.”