Threat to one in three retailers

Big name collapses such as Jessops show that our high streets need to adapt.
Big name collapses such as Jessops show that our high streets need to adapt.
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INSOLVENCY experts have warned that almost one in three Blackpool shops are at risk of failing.

The warning comes as Local Growth Minister Mark Prisk told the high street that it cannot live in the past but must change to meet radical changes in consumer behaviour over the past few years.

He was launching a new national Future High Streets Forum of leaders from retail, property and business to better understand competition faced by town centres.

It will also investigate parking, how to make it easier for pop-up shops to use empty spaces and allowing commercial landlords to turn part of their building into residential property to bring more people into town centres.

Figures from R3, the trade body for Insolvency Professionals, show that 30 per cent of retailers in the North West are at risk of failure within the next 12 months,

In Blackpool it estimates that out of 243 retailers, 69 are at risk under data from Bureau van Dijk’s Fame database. This compares to a risk rate of 23 per cent within all types of business in the area.

Jeremy Oddie, North West regional chair of R3 and head of recoveries at accountants Mitchell Charlesworth, said: “Despite the recent closure of Jessops, R3’s figures show that over the past two years, nearly half of all jobs and stores have been saved during major retail failures, thanks to the UK’s flexible insolvency regime.

“However, we do need to be honest and realistic in establishing a ‘tipping point’ where resuscitation is impossible.

“We believe around one in ten retail businesses is a zombie business, kept alive by the forbearance of banks and low interest rates.

“The big retailers we have recently seen enter administration were known to have been in a precarious situation for some time.

“The high street is having to re-define itself, and many chains have been shedding stores to create a more workable business model. This process could reach a natural conclusion at some point in the year ahead, although we expect a few more major insolvencies in the meantime.”

Steve Pye, from the Federation of Small Businesses in Blackpool, said there were many challenges facing the high street and there was no one stock answer.

He said: “One problem that seems to fertilise the malaise on the UK high streets is that there are several businesses do not have an online marketing strategy, such as regular product sales or updates on Social media websites.

“A lot of businesses don’t even have a website that sells or promotes their products, opening times or even contact details.

“But one of my biggest concerns is when staff stand in shop doorways, smoking and putting people off from entering their premises.

“What a difference would it make to the high street if some of them looked at the way their competitors trade and copy some of their ideas and practices.”

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