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Administrators retain nearly half of staff and shops at troubled chains
THOUSANDS of high street jobs have been saved despite the collapse of major retailers, new figures have revealed.
A report into more than 20 insolvent chains during the last two years shows administrators saved nearly half of all jobs, with a similar number of stores surviving.
The figures, which do not include the recent demise of HMV, Jessops and Blockbuster, come just days after clothing chain Republic, which has branches in Darlington, Middlesbrough and Sunderland, called in administrators.
The report, from insolvency body, Rescue, Recovery and Renewal, and administrator Deloitte, shows more than 6,800 jobs were lost after electricals group Comet closed its 243 stores across the UK, with JJB Sports cutting 2,200 posts when it shut 123 outlets.
However, administrators retained about 4,500 jobs at Clinton Cards from its original 8,000-strong workforce, with 400 of its 784 stores remaining open, kept more than 1,130 workers from an original 3,885 jobs at outdoor clothing company Millets, and saved 3,896 jobs at computer game company, GAME, which previously employed 6,000 people.
Steve Ross, chairman of R3 in the North-East, and a partner in the restructuring department of accountancy firm RSM Tenon's Sunderland office, said companies were adapting, but warned of further potential insolvencies.
He said: “The complete disappearance of Comet took us back to the collapse of Woolworths in 2008, but while very traumatic for everyone involved, many retail collapses are not this cataclysmic, and significant parts of retail businesses are surviving.
“We are still in a period where the high street is having to re-define itself, and last year saw an extensive period of stores portfolios being shed to fit a more workable business model.
“This process could reach a natural conclusion at some point next year, although even allowing for all the bad news we’ve had since the start of 2013, I would expect a few more retail insolvencies.”
Mr Ross said despite the relatively encouraging results, retailers had to constantly adapt to the changing economy and called on landlords to helpcompanies.
He said: “Consumers are forcing retailers to make some stark choices, and in some cases, it will be modernise or disappear from the high street entirely.”
“A polarisation in rental portfolios is also taking place as retailers target the higher footfall and higher cost locations at the expense more stores spread over lower rent locations with lower footfall.
“Landlords will have to offer greater flexibility than the olden days of locking in businesses into onerous, long-term leases.”