Recovery Expert Welcomes Plans Following Release Of Store Closure Figures
22nd October 2012
The Government's announcement that business rates will not increase in real terms until 2017 will be a timely boost for many retailers in light of worrying figures on the number of companies failing, according to a Sheffield- based corporate recovery expert.
Communities minister Brandon Lewis has confirmed that businesses will face reassessment in five years, when it is hope that the economy will have recovered and companies are not susceptible to major increases in tax. News of the move has come after research by the Local Data Company, compiled on behalf of PricewaterhouseCoopers, revealed that multiple retailers saw the rate of store closures reach 20 stores a day in the first six months of 2012. The rate in July and August was also found to have increased to 32 per day. Different types of chain were found to have been affected by such issues, from toy shops, clothing outlets and jewellers to card and poster shops and furniture stores. Andrew Walker, a Partner and expert in insolvency and corporate recovery at Irwin Mitchell in Sheffield, said the wide range of areas affected by these problems means that a huge number of retailers are likely to have a positive outlook on the Government's announcement. He explained: -We have seen little sign of a slowdown in terms of this economic climate claiming high-profile casualties, with JJB Sports being one of the most notable in recent weeks. -Such issues have shown companies that they need to be prepared to evolve and adapt to the conditions they are facing, with the primary objective of remaining competitive. -For example, while some of these reported store closures may have been driven by administration, it may also have been due to retailers simply refocusing their efforts away from the high street and retail parks. This may be through the use of online assets in particular. -However, for many some visibility on high streets will remain part of their strategies, which is why this apparent freeze on rates for five years is likely to be welcomed. It is another step towards ensuring that retailers do not face any nasty surprises as they look to tackle these currently difficult conditions and ride out the current economic storm.