High street facing a bleak midwinter as commitments loom

Elizabeth Fournier
A PERFECT storm of rental payments, tax deadlines, squeezed consumer spending and stretched lending conditions is swirling round the UK retail sector, with the new year expected to be crunch time for several struggling firms.

Not only was Christmas day the latest official quarterly rent payment for retail tenants, but stores also need cash to restock after their peak trading period, and to cover annual tax and trade insurance premiums – without which funding costs go through the roof.

The success or failure of a struggling business at this point will be dependent on its landlord and its lending bank, with those retailers that have performed poorly over Christmas hardly likely to find themselves at the front of the line when lending is as tight as it is.

For the most likely victims, turn to the sectors that are becoming more and more dominated by internet trading, making their high street presence obsolete.

Unless all their stakeholders are willing to work together, more failures will come thick and fast.