Nearly half of UK fashion retailers at risk of failure says report

By

Sandra Halliday

Published
Dec 29, 2016

Nearly 4,000 UK fashion retailers are at risk of going under at present, a new study shows. Opus Restructuring said 3,991 - or 43.6% of all UK fashion retailers - are close to failure, up from 37.1% of them being in trouble a year ago.

Nick Hood, business risk adviser at Opus, said: "The UK fashion retail sector is under exceptional strain, with plenty of anecdotal evidence of sustained periods of discounting as consumers demand ever-lower prices and as the fall in sterling impacts their costs and profit margins.”

Opus used data from corporate health specialist Company Watch and found a large number of fashion retailers fell into its "warning area" (with a rating of 25 or less out of 100), which means they could be facing a major restructuring or even a collapse within there years.

While it said that mid-sized and small retailers are at most risk, even larger chains are struggling to maintain profitability.

Opus said major fashion retailers last year saw total profits of £1.87bn, a 28% fall in just two years, while their debt rose 11.6% to £2.5bn.