Credit, Collections & Insolvency News
Non-essential shops have been allowed to re-open for business by the government. As a business owner in the retail industry, this has no doubt been a welcome announcement, however, you would be forgiven for not thinking that this means ‘back to normal.’
The next few months will be critical, and it will no doubt be a very testing second half of the year for you as a business owner.
We are already seeing the knock-on effects that lockdown has caused, with many insolvencies across the retail industry, and business owners having to call in the help of insolvency practitioners.
Many retail businesses have managed to turn to their online outlets to provide some big positives.
In May alone, figures show that online sales jumped by 130 per cent, as consumer habits accelerate towards the already established trend of online shopping as opposed to the high street.
No doubt these figures are encouraging, and the easing of lockdown has led to new optimism for the near future. However, spending over the past few months has halved and clothing sales alone are down 60 per cent.
With talks of travel restrictions ending and holidays on the horizon, this will hopefully result in shoppers looking to make purchases as they head back out to the shops.
That being said, the shift toward internet shopping and the continued rise of rents and business rates is a clear indication of a difficult future for retail, especially businesses that do not have an online presence.
One increasingly popular way of retail businesses coping with these difficult times is by entering a Company Voluntary Arrangement (CVA).
This is a formal agreement made between the company and its unsecured creditors and by entering this agreement the company can avoid liquidation proceedings and continued creditor pressure (for more information on CVA’s click here)
What we can be sure of, is that it is crucial that retailers of all sizes keep track of the warning signs and if you are aware your business is going through difficult times it’s important to consult the expert help of an insolvency practitioner as soon as possible.
