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More retailers could go to wall, says shoe shop boss; CASE STUDY: RETAIL.


Shoe retailer Paul Lamb fears more retailers in Birmingham will go out of business despite the Chancellor's measures to help with tax deferment and cash flow problems.

The owner of Sims Footwear, which has city centre shops in the Great Western Arcade and Stephenson Street, said the Budget offered little help to struggling retailers.

The 46-year-old father-of-two is also worried that VAT will be increased to about 20 per cent after December.

He said: "There wasn't really anything in the Budget that will do much to help independent retailers like myself. The headline was the tax rate for high earners and that obviously doesn't affect me.

"People keep talking about deflation though and I can't understand this with the current exchange rates.

''I have been talking to my suppliers and prices are increasing. For example, Dr Martins last year were costing around pounds 65 and now they are pounds 85 because they are made in the Far East which trades in US dollars and the pound is weaker.

"Then there is the euro which has gone from about 1.65 to almost one for one in a year. We don't make anything. It is a crazy situation. Customers want bargains but bills keep rising.

"Business rates are ridiculous. They have gone up at least ten per cent which is about pounds 3,000 extra per year." Sims Footwear has been trading since 1997 and has seen its turnover fall from about pounds 1 million to pounds 500,000 in the past five years.

Paul said the fall in turnover along with the increased business rates and high rents was making trading extremely difficult.

He added: "We have suffered a gradual decline of about 10 to 15 per cent a year and we are just getting by. People ask why I don't relocate but we have leases we are obliged to stick to. They only way to get out is to go bust. We don't have any bargaining power. The law is on the side of the landlord." "Things are very, very tough and have been for years. In the Great Western Arcade, there are 17 empty shops, two have closed very recently - Scallywags and the Gallery - and they are not businesses that have only been around for six months. They were established, successful businesses." Despite the gloom, Paul acknowledged that businesses had been offered support to pay taxes late.

He said: "In terms of cash flow they have been supportive with late payment of VAT and PAYE which we have to pay quarterly.

''We can defer payments without incurring penalties or interest but this is not a new thing, we have known about this from January.

"I don't really understand the VAT cut because a couple of per cent doesn't really make a difference when prices have rocketed by 20 to 25 per cent.

"The thing that worries me about VAT is that it will go up to 20 per cent. I heard that this could be the case and that would be another problem."


Paul Lamb fears for the future of small retailers
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Publication:The Birmingham Post (England)
Date:Apr 23, 2009
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