Begbies warns of more firms going bust
Insolvency expert Begbies Traynor are warning that more retail chains will go bust before the middle of January.
Begbies said it would not be surprised if between 10 and 15 well-known chains did not make it beyond the festive period.
Should its warning ring true, then more retail workers will face 2009 jobless.
It was announced last week that Woolworths, which has been an icon on the British High Street for almost 100 years, is closing its doors in January putting nearly 30,000 out of work.
Woolies has been struggling under a mountain of debt and has been under pressure from competition from large supermarkets and the internet.
Furthermore, furniture chain MFI has now ceased trading after a buyer failed to emerge for the business. The chain has suffered due to competition from rivals such as Ikea. Nearly 1,500 lost their job as a result.
Other high profile chains that have gone under this year are SCS, Dolcis, MK One and Rosebys.
According to Nick Hood of Begbies, few retailers are profitable because they are discounting at a time when they would usually generate all their profits for the year.
According to City analysts, a mass of profit warnings are expected from retailers who are listed on the stock market and retailers will start to lose money.
Retailers have been anticipating their worst Christmas period for years and have been tempting shoppers with discount days and December sales.
Marks and Spencer has held two sales in the last few weeks, while Debenhams has held three-day sales and Tesco, Britain’s largest supermarket, held a one-day sale last week offering 50% off Christmas goods.
Finally, In a bid to boost sales even further, supermarket giants Tesco, Asda and Sainsbury’s are to open some of their larger stores on Boxing Day. There is speculation that other retailers will feel under pressure to follow suit.
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