Shops in the South East are continuing to perform well with retail standing out as one of the most robust sectors in the region this month, according to research by R3.
The latest research by restructuring and insolvency trade body R3, compiled using Bureau Van Dijk’s Fame database, reveals that while many of the sectors R3 monitors experienced marked rises in the number of businesses at increased risk of failure, retail saw a rise of just 3% since September, close to the average across the UK of just 2.3%.
However, although distress in retail does not appear to be worsening significantly, it remains at a fairly high level – of the nearly 26,000 active businesses in the sector in the South East, 7,330 are in the overall negative band. This represents 28.3% of shops in the region, slightly higher than the national figure of 26.5%.
Garry Lee, vice chairman of R3's Southern Committee and senior manager of recovery and restructuring services at Smith and Williamson, says: “Retail sales are often seen as the benchmark for the health of the wider economy so it’s encouraging that this news teamed with the ONS’s most recent figures showing a 1% growth in retail sales in August is looking positive for the sector.
“Despite online shopping proving a popular choice in recent years, with Christmas approaching many people will still continue their tradition of going out to the shops to choose gifts to avoid any possible delivery issues.”
However, credit cards were top of R3’s recent personal debt survey as the leading cause of worry for those with debts with the survey discovering that number has risen from 39% in June 2016 to 51% now.
“Contactless payments and payment through your mobile phone are likely to be disconnecting users from how much they are charging to their card. The ease of these purchase processes make it very simple for people to not realise that their debt is growing,” said Lee.
Business owners and directors across all sectors are advised by R3 to continue to monitor their finances carefully, plan for all foreseeable eventualities and keep careful records of their decision-making processes including the evidence upon which those decisions are based. It is vital to remain alert to signs of trouble, which requires high quality data to be available to management, and to be ready to adapt to the changing economic landscape.
“If in doubt, receiving professional advice from qualified and regulated restructuring specialists as early as possible will help to maximise the options for a business and to ensure that greater value is preserved and enhanced,” concluded Garry.
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