It has been another turbulent year for the UK high street, which has struggled to adapt to changing consumer behaviour while battling rising overhead costs.
Household names such as Debenhams, Mothercare and Clintons hit the news after they were forced to launch restructuring plans, close stores or simply stop operations.
Retailers have become increasingly reliant on company voluntary arrangements and pre-pack administrations to slash rents and their store portfolios. According to the Centre for Retail Research, 38 companies failed in 2019, with more than 42,938 employees affected in the year to the end of November.
It wasn’t all bad news for retailers in 2019, however, with JD Sports, Next and Ocado all within the top 10 best performing stocks of the year, proving that with the right price, product and multi-channel format, high street stores can survive and thrive despite the well-documented challenges facing the industry.
The biggest retailers to go bust this year
Parent and baby retailer Mothercare will shut down its entire UK store portfolio despite a rescue plan implemented last year. Last month the company said it will shutter its 79 stores in the UK after determining they were “not capable of returning to a level of structural profitability”. Analysts said Mothercare’s inability to adapt to a modern market and a lack of investment in online operations were to blame for its downfall, while its failure to recover despite implementing a CVA could ring alarm bells for other retailers.
Department store Debenhams collapsed into administration in April this year, after which it was immediately bought by a consortium of lenders in a move that wiped out its existing shareholders including Sports Direct founder Mike Ashley. The pre-pack administration deal saw around 50 outlets flagged for closure.
Budget clothing retailer Bonmarche was the latest victim of “challenging trading conditions” when it fell into administration in October. The company said cash flow pressures meant it was unable to meet its financial obligations, however no jobs were lost as administrators continued to look for a buyer for the firm. Billionaire businessman Philip Day, who owned a majority stake in the company at the time of its collapse, was last month named the preferred bidder for the retailer through his rival firm Peacocks.
Regis and Supercuts
Supercuts owner Regis appointed Deloitte as administrator in October following a legal challenge to its restructuring plans, putting the future of its chain of budget hair salons across the UK at risk. The company secured a rescue deal earlier this month when Bushell Investment Group supported a management buy-out of the business and assets of Regis UK.
High street card retailer Clintons was saved through a pre-pack administration at the beginning of this month, in a move that saved 2,500 jobs in the run up to Christmas. The company was bought out of administration by Esquire retail, a new vehicle that was established by the Weiss family that has owned the card firm since 2012. The deal allowed the retailer to continue trading throughout December, the firm’s busiest month of the year.
Mamas & Papas
Just days after Mothercare collapsed, rival maternity retailer Mamas & Papas called in administrators in order to shutter loss-making stores. Bluegem Capital, which has owned the company since 2014, regained control of the retailer through a pre-pack administration deal , which allowed it to close six unprofitable stores. Branches in Aberdeen, Preston, Milton Keynes, Lincoln, Leamington and Fareham were closed and 73 workers were made redundant following the deal.
Links of London
Jewellery chain Links of London collapsed into administration earlier this year when it ran out of cash before owner Folli Follie was able to secure a sale or restructuring plan for the company, putting hundreds of jobs at its 28 standalone stores at risk.
Fast fashion firm Boohoo bought the Karen Millen and Coast brands out of administration earlier this year for £18.2m, putting more than 1,000 jobs at risk store closures loomed following the failure to secure a sale of the entire business. At the time Boohoo said the online businesses, which reported direct online sales of £28.4m in the financial year to February, would be “highly complementary additions” to its e-commerce platform.