Mon, 25 Jun 2012 | BUSINESS NEWS
Insolvency body R3 has warned that the quarterly rent due day this week could force several more retailers into administration.
Shopkeepers will be expected to hand over three months’ rent in advance this week to landlords.
Lee Manning, the president of R3 commented: “Rent quarter day is typically the time when [struggling] retailers go into administration.
“Retailers are committed to meeting three months of obligations on their stores, while they often have pressure on cashflow at the end of the month from the payroll and maybe a VAT bill too.”
R3 made public the results of its research, which showed that 26 per cent of retailers are in the “caution” or “high risk” bands in regards to entering a distressed situation in the next 12 months.
Creditors are known to prefer retailers to enter administration at times in the year when shops have a surplus of stock that needs to be sold – at Christmas and at the end of June.
Since the start of 2011, 21,000 jobs have been lost in the physical retailing industry in the economic downturn due to fierce competition from internet retailers, with several retail failures including Game, Peacocks and Clinton Cards.
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