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Home / News and Insights / Insights / High street retailers: what does the future hold?

2023 proved to be another fateful year for the high street with household names such as Wilko, Paperchase, Victoria Plumb and Hunters, all collapsing into various insolvency processes. Indeed, according to statistics published by the Centre for Retail Research, 10,494 shops closed their doors during 2023 resulting in the loss of almost 120,000 jobs, not to mention an abundance of unoccupied commercial real estate.

According to a recent article published in The Independent, experts believe high street retailers will remain one of the hardest hit industries in 2024. This will come as no surprise to those in the sector who, while still vying with the fallout from the pandemic, are now facing a further foray in the form of high energy prices, borrowing costs, and inflation. When compounded by the pressure on individual finances, which, for the most part, has resulted in a decrease in consumer spending, it is no wonder the bottom line is a continuing cause of concern.

That’s not to say that if the worst happened, the nation’s favourite shops would be disappearing into the abyss. On the contrary, the past few years has seen a multitude of brands successfully rescued via restructuring and insolvency processes. In practice, there is quite often nothing inherently wrong with the brand itself, but behind the scenes there are operational struggles, potentially out of date business structures and practices, and / or legacy debt that is simply unserviceable.

However, experience has shown that by identifying those underlying issues and with the right advice, even a distressed brand can turn itself around. In more cases that not, this is primarily facilitated by utilising an appropriate process such as a Company Voluntary Arrangement, Restructuring Plan and / or Pre-Pack Administration. In the alternative, our practice has also observed an emerging trend of distressed, pre and post liquidation sales, an opportunity which has proved popular amongst retail giants looking to diversify and expand their portfolios.

Prior to Christmas 2023, 4,500 high street retailers were said to have been in ‘critical financial distress’. Accordingly, there is no doubt that 2024 will be another turbulent year for the industry. In order to avoid becoming another casualty, brands will need to work proactively with both strategic and financial advisors to ensure they are best placed to ride out the perfect storm that is currently upon them. Aptly put by Benjamin Franklin: ‘fail to prepare, prepare to fail’.

Our restructuring and insolvency team has a proven track record for navigating high street retailers (and other industries) through financial and operational struggles. Utilising established relationships with insolvency practitioners, lenders and investors, our team is uniquely placed to offer a full-service approach. If you have any concerns about your business, then please contact a member of our restructuring and insolvency team.

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