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Insolvency Law

Expert guidance on all aspects of corporate and personal insolvency

20 AUG 2012

Insolvency in the News: corporate insolvencies fall according to Experian; CVAs as a popular choice; things looking up in Scotland and some new research from R3.

There are a number of interesting insolvency news items that have appeared in the press over the last couple of working days. The Press Association have an interesting piece on how corporate insolvencies have fallen, according to some research undertaken by Experian. Elsewhere, the Guardian has an interesting piece on the attractiveness of CVAs to avoid insolvency. Who might have predicted that four years ago?! Things are also looking more healthy in Scotland, where the Scotsman is predicting that insolvencies are at a two year low.  Finally, R3 have published some interesting research on jobs and insolvency in the retail sector. Here are the details: 

 

"More than half of jobs survive insolvency in the retail sector

 

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 Blacks, Clinton Cards and Aquascutum.

R3 President Lee Manning 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. In fact, according to figures from Deloitte, we could be seeing significant downsizing of between 30-40% over the next 3-5 years.

Lee Manning 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.”

 

 

Major Retail failures 2011/12

Pre-Insolvency

Post-insolvency

Company

Stores

Employees

Stores

Employees

Blacks / Millets

313

3,885

224

2,750

Focus DIY

180

4,000

55

1,000

Habitat

33

750

3

150

Homeform+

160

1,300

50

740

(Moben Sharps Dolphin)

Jane Norman

89

1,600

33

1,200

La Senza

146

2,600

60

1,300

Past Times

47

1,500

Nil

Nil

Peacocks

614

7,500

388

4,320

Oddbins

139

600

43

150

TJ Hughes

57

4,000

15

1,800

Stylo Barratt

191

3,840

90

2,240

Hawkins Bazaar

65

380

8

80

GAME

610

6,000

333

3,896

Alexon*

75

3,000

50

2,700

Clinton Cards

784

8,000

400

4,500

Updated figures

Julian Graves (Deloitte)

189

755

n/a - still trading

n/a

Allders of Croydon (Duff & Phelps)

1

330

n/a - still trading

n/a

Allied Floors (Duff & Phelps)

9

41

9

41

Aquascutum (FPR Advisory)*

3

250

3

135

7 (outlet stores)

Fenn Wright Manson (Zolfo Cooper)

17

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