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The real risk to our retailers; FEEDBACK.

APPARENTLY there are 21 reported cases of shoplifting a day in South Wales ("Concern at major rise in shoplifting", Echo, May 19).

As there are many thousands of shops, this must mean about one item stolen from each shop per 1,000 days.

Shoplifting is one of several components that make up shrinkage. Others include goods passing their sell-by date, breakages, faulty goods returned by customers and staff pilfering.

Many retailers have gone bankrupt, closed down or had financial difficulties in the past few years but I suspect that in none of these cases was shoplifting a major factor. The main killers of retailers have been over-leveraged takeovers based on debt, sale and leaseback of premises and failure of landlords to aggressively reduce rents to reflect changing market conditions.

In most businesses it is normal to write down the value of buildings over a 50-year period. In retail it seems to be the practice to charge high rents for 100-year-old obsolete premises in the wrong places.

The Government is paranoid about monopolies of companies in the same business merging but takes a complete hands-off approach with highly-leveraged takeover bids, which are far more dangerous when the firm goes bankrupt. When a takeover is planned, it should be allowed only when the firm doing the taking over issues shares to finance the takeover or it already has money in the bank. It should not be financed on borrowed money.

Ralph Rees Penylan, Cardiff
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Title Annotation:Letters
Publication:South Wales Echo (Cardiff, Wales)
Date:Jun 13, 2014
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