Quarter of Welsh retailers at risk of failure this year - R3; WARNING FOLLOWS COLLAPSE OF MAJOR NAMES.
MORE than a quarter of Welsh retailers are at risk of failure in the next 12 months, according to research by insolvency trade body R3.
The warning comes in the wake of three major high street names - Jessops, HMV and Blockbuster - collapsing into administration this month.
On Saturday administrators for Blockbuster announced plans to close 129 of its 528 stores in the coming weeks and make 760 of its 4,190 employees redundant.
According to R3's analysis of figures from Bureau van Dijk's 'Fame' database (26.4%) of Welsh retailers are now at risk of failure.
Joanne Rumley, chair of the R3 South West and Wales region and Partner at law firm Bond Pearce, said that while a spate of administrations had hit the high street in recent years, jobs had been saved in many cases.
"The failure of Jessops and the uncertainty over HMV and Blockbuster's future has cast a further shadow over the high street, and follows the collapse of Clinton Cards, JJB Sports, Comet and Woolworths over the last four years," she said.
"However, many retail collapses are not fatal - significant parts of a retail business can survive beyond the administration process.
"This is still a period where the High Street is having to re-define itself, competing with online offerings and changing buying habits. 2012 saw an extensive period of retailers shedding some of their store portfolio to achieve a more workable business model.
"Some retail insolvencies at the outset of this new year, following the final rent quarter day of 2012 which fell on Christmas Day, were inevitable as they form part of the retail cycle. We may also see some more over the coming months."
"Landlords are being asked to offer greater flexibility on lease terms compared to the days of locking businesses into onerous, long-term leases," she added. "Consumers are forcing retailers to make some hard choices and the winners will be those that listen and adapt."
An analysis of major retail insolvencies since 2011 by R3 found that 44% of jobs are preserved during the insolvency process, while 47% of stores survive.
Announcing further store closures on Saturday, Blockbuster's administrators said the move was necessary to make the business saleable.
Lee Manning, of administrator Deloitte, said: "Having reviewed the portfolio with management, the store closure plan is an inevitable consequence of having to restructure the company to a profitable core which is capable of being sold.
"We would like to thank the company's employees for their support and professionalism during this difficult time.
"We are also grateful to the customers for their continued support."
The administrator said an employee helpline and an "employee assistance programme" are in place to help staff find other jobs.
The firm's trading woes were blamed on competition from internet firms and digital streaming of movies and games.
Blockbuster had struggled to adapt to the changing market and rivalry from internet retailers including Netflix, Amazon's LoveFilm and iTunes, which now offers a movie rental service.
Administrators for Blockbuster announced plans to close 129 of its 528 stores in the coming weeks
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|Publication:||Western Mail (Cardiff, Wales)|
|Date:||Jan 21, 2013|
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