Region bucks trend with rise in business failures

The latest regional administration research shows that Yorkshire and the North East suffered 305 business failures in 2012, up nine per cent from 280 in 2011.

All other regions experienced a drop in administrations, with England as a whole seeing 1,833 businesses enter administration, down from 2,009 businesses in 2011.

Dan Butters, restructuring services partner at Deloitte in Yorkshire, said: “The year-on-year figures for Yorkshire and the North East are particularly bleak, and are a stark reminder of the difficulties which continue to face businesses. Constrained budgets and the challenges facing all sectors mean it is certain that we will see further distress next year.”

Mr Butters said the retail sector would continue to face a particularly challenging time in 2013, despite the opening of the Trinity Leeds development.

He added: “For retailers, Christmas trading appears to have been reasonable, though not spectacular, and not enough to prevent insolvencies in the first quarter of 2013.

“It is also notable that high profile, nationwide chains continue to be among the casualties despite the shake-up seen in the sector since 2008. “Last year alone we have seen Peacocks, La Senza, Blacks, Game, Clinton Cards, JJB Sports and Comet enter administration,” he added.

“Consumer confidence remains fragile, and where we have seen some respite through lower inflation, this has not translated into increased spending, with many consumers preferring to pay down existing debt or save.

“Strong consumer spending growth is not likely to return any time soon which makes it essential that retailers address the fundamental issues affecting the industry – store portfolios and multichannel. There will always be a need for physical retail space but at present, too many retailers have too many stores and 2013 is likely to be marked by further closure programmes, both within and outside of formal insolvency processes.”

Nationally, the number of retailers falling into administration in 2012 increased by six per cent compared with 2011. Altogether, 194 retailers entered administration in 2012, compared with 183 in 2011 and 165 in 2010.