Retail crisis deepens as 25% of UK’s top retailers are loss-making - study
A new study analysing the financial health of thousands of UK retailers has found that many British brands including Hobbs, Mamas & Papas, Missguided, Thomas Pink, TM Lewin, Crew Clothing, Forever 21 and Crocks UK are currently operating at a loss.
Company Watch, a financial analytics firm, reviewed the latest published full year financial accounts of 1,625 UK retailers, finding that a staggering 26.5% of UK retailers are loss-making.
The finding follows the collapse of several major chains such as Jaeger, Jacques Vert, Theo Fennell and East, the group behind the Joe Bloggs fashion brand, in the past twelve months.
More companies are likely to join if base rates were to double from 0.5% to 1% this year, predicted Company Watch after applying these higher debt costs to the interest, loan, and overdraft charges detailed in the accounts.
The number of loss-making retailers would increase by 4% to 492.
“It’s no secret that bank base rates are set to rise this year at least once and maybe twice. For many of the household name retailers that are loss-making and already in our warning area, a rise in the cost of debt this year could well be the final straw,” said Jo Kettner, CEO of Company Watch.
“Retail suppliers and trade creditors are monitoring this situation closely and will be looking for signs that appropriate action is being taken by retailers to prepare for higher interest rates.”
Company Watch rated Next, Burberry, Fenwick and Moss Bros as financially robust.
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