‘More big high street names to fall’

Partner Mark Firmin, whose team handled the administrations of Blacks, Bonmarche and Past Times, said the combination of continued uncertainty, high inflation and the deleveraging of households means that consumer-facing businesses are having a “torrid” time.

“Everybody is finding it tough,” he told the Yorkshire Post in an interview about the retail sector. “Everybody is fighting for the consumer pound.” Properly-funded companies with good business models that have adapted to the changing world will be resilient, but those that have not restructured, changed their strategy or moved quickly enough are finding themselves exposed, he said.

Mr Firmin added: “I suspect there will be at least two or three big names over the next three to five months that will go through the insolvency process.

“Hopefully, the businesses will be saved and restructured but I still think there will be some big names in the high street.”

He said that companies which went through financial restructuring two or three years ago now face operational restructuring as the expected pick-up in trade has not materialised. And so-called zombie companies “are going to run out of steam” as funders lose patience with businesses that struggle to make a profit.

KPMG advises firms to keep in touch with all their stakeholders and calculate how much working capital they have.

Mr Firmin said: “It’s absolutely critical that businesses really understand who their stakeholders are and what their needs are, whether they are funders, landlords, credit insurance providers or suppliers.

“They are all stakeholders and they all have competing needs and competing information requirements.

“Businesses ignore stakeholders at their peril.”

Mr Firmin urged some retailers to improve their online offering. “There are still a lot of awful websites out there that make it hard for people to buy from them,” he said.

He is optimistic that a resolution will be found for the European debt crisis and has been encouraged by recent economic indicators from the United States.

Mr Firmin said: “Once we feel that growth is coming back, it will give people the confidence to spend a bit more money from a consumer perspective and potentially go out and buy some businesses again.

“There’s a danger at the moment that instability and lack of confidence generally is putting people off buying businesses.

“If there’s a business struggling in the market and needs a buyer, there’s a little bit of nervousness among many of the trade buyers at the moment.

“They don’t know what’s happening.

“I’m optimistic there will be a resolution to the eurozone crisis and I think America seems to be starting to grow a bit.”