Ian Carrotte of ICSM Credit looks at the reasons behind the rise in business failures

The final quarter of last year revealed administrations were up by 24% and creditors voluntary liquidations were the highest in a decade. Statistics released by the Government’s Insolvency Service also showed that last year there were 17,196 company insolvencies which is the highest since the tail-end of the Credit Crunch in 2009.

"I also feel some businesses are too slow to change in keeping up with trends"

Ian Carrotte of ICSM credit said this was in line with the credit intelligence group's findings. He said: “Company Voluntary Liquidations now make up 70% of all company insolvencies with compulsory liquidations at 17%. We’ve noticed how insolvencies have risen sharply towards the end of 2019 and I keep on saying this isn’t a spike – it’s a trend.

“What the reasons are is harder to pinpoint. Brexit uncertainty is part of it while a general slow-down internationally hasn’t helped. There’s been the trade war between the USA and China and now the Corona virus is having an effect. But there’s a change in lifestyle. Retailers have been hit by online shopping as has the hospitality sector with home entertainment. That has a knock-on effect for construction and haulage. Business rates have been cited but I also feel some businesses are too slow to change in keeping up with trends.

“Then there are trends such as electric cars and bikes, ethical shopping and even the rise in popularity of vegan diets. If you don’t keep up with shifts in society and business you are likely to find your once solid customer base disappear.”

The latest casualties have been Axminster Carpets, Beales Department stores and Prime Seafoods who employ 70 workers.

^{Prime Seafoods has been hit by fluctuating fish prices}

The publication website Company Rescue reported: “Prime Seafoods last published accounts detailed up to the end of May 2018. They had a turnover of £28 million but  suffered with pre-tax losses of £236,000 after a trading shortfall of more than £317,000 the year before.”

However there was some good news as the American owned Forever 21 fashion store chain has been bought by Authentic Brands, Simon Property and Brookfield Property after it filed for bankruptcy last September. It has three stores in the UK. And speaking of retail French Connection says it is no longer looking for a buyer but is trying to turnaround the ailing chain store. Finally The Office for National Statistics (ONS) said the amount of goods sold in January in Great Britain rose by 0.9%, after falls in the previous two months. 

Ian Carrotte commented: "It's a small rise but after weeks of poor sales that could be a chink of light for business."

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com

For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk

Picture: Retail Gazette