The 30 most shocking retail fails of 2020 – who will be next?

The home delivery expert ParcelHero says that 2020 was the worst year on record for High Street retailers, with many of Britain’s favourite stores collapsing into receivership and thousands of jobs lost. It says the battle for survival for High Street stores has become critical, as online sales climbed 74% YOY in November, even as some much-loved High Street stores closed for the final time.

ParcelHero’s Head of Consumer Research, David Jinks MILT, reveals the 30 biggest failures of 2020 and says he fears 2021 will be equally grim for retailers who fail to embrace a combined web store and High Street sales policy.

Says David: ‘By last November, online shopping had snatched 34% of all retail sales. It’s little wonder many favourite British brands hit the rocks last year. This is our list of the biggest names to fail in 2020. Who would have believed, just a few years ago, that iconic brands such as Cath Kidston, Topshop and Victoria’s Secret would have to call in the administrators, not to mention staples such as Bensons for Beds and Oddbins?

‘Of course, some of the stores on our list were saved by being bought out of administration, while others have risen again as online-only stores. The fact is, however, all these household names failed to remain solvent, with many leaving hundreds of suppliers and other creditors in their wake.

‘2021 has started just as bleakly. Non-essential stores are shuttered, great brands such as Debenhams are winding down and Paperchase is on the brink of administration. Many more brands will join 2020’s rollcall of ‘retail fails’ if they don’t fully embrace a combined web store and High Street sales policy.

  • Beales: The long-established department store chain has entirely closed
  • Bensons for Beds: Bought out of pre-pack administration by its owners Alteri
  • Bonmarché: Bought out of administration this month
  • Brighthouse: Still functioning but no new loans offered
  • Burtons: Part of Arcadia Group collapse. Trading in administration
  • Cath Kidston: Bought out of administration, only website and 5 stores remain
  • DW Sports: Brand disappeared after assets bought by Fraser Group
  • Debenhams: Trading in administration. “Closing-down” sale now on
  • Dorothy Perkins: Part of Arcadia Group collapse. Trading in administration
  • Edinburgh Woollen Mill: Bought out of administration this month
  • Evans: Part of Arcadia Group collapse. Online business bought by City Chic
  • Go Outdoors: Bought out of pre-pack administration by owner JD Sports
  • Harveys Furniture: Once UK’s largest furniture store. No new online orders
  • Hawkin’s Bazaar: Brand bought by H Grossman Ltd, still trading online
  • Intu: Retail landlords including Intu have also fallen into administration
  • J Crew: US-based clothing brand closed all its UK stores in 2020
  • Jaeger: M&S bought the brand out of receivership in January 2021
  • Laura Ashley: Brand bought out of administration, will appear in Next stores
  • M & Co: Pre-pack buyout, closed nearly 50 stores
  • Miss Selfridge: Part of Arcadia Group collapse. Trading in administration
  • Oak Furniture Land: Bought out of pre-pack administration
  • Oasis: Brand and online operations only bought by BooHoo
  • Oddbins: Off-licence chain bought out of administration
  • Peacocks: Trading under administration
  • Quiz: Bought out of administration by owner, closing some stores
  • TM Lewin: Bought out of administration, all stores closed, online trading only
  • Topshop: Part of Arcadia Group collapse. Trading in administration
  • Victoria’s Secret: UK arm now joint-owned by Next following administration
  • Wallis: Part of Arcadia Group collapse. Trading in administration
  • Warehouse: Brand and online operations only bought by BooHoo

‘In January 2017, we released 2020: Death of the High Street, a high-profile report that was discussed in Parliament. We said that, unless retailers developed an omnichannel approach that embraced both online and physical store sales, the High Street as we know it would reach a dead-end by 2030. The coronavirus pandemic has only hastened its demise.

‘Only stores that embrace their website as their most important shop window and ensure their online service matches the standards of their in-store experience will survive.’

Data shows cautious optimism for 2021 but EU deal ‘gaps’ are a concern says RSM

Today RSM’s Financial Conditions Index indicated signs of cautious optimism emerging for the year ahead. But whilst the Trade and Cooperation Agreement with the EU has been largely welcomed by middle market businesses, RSM says the absence of clarity around key issues including financial services explains the lag on improving sentiment, to add to that fuelled by the global pandemic.

The firm’s Index, an aggregated performance indicator of currency, bond and equity markets, has made a slow climb, from -0.9 below normal stress levels in Q3 2020, to a reading of -0.1 today.

The climb has been bumpy, reflecting the nervousness fuelled by the further UK lockdown restrictions since Q3 and the uncertainty surrounding Brexit negotiations. Nonetheless it seems the commencement of the vaccine rollout and the fact a deal with the EU has happened is allowing businesses to take a more optimistic long-term view for 2021 that will start to accelerate during Q1 2021.

Simon Hart, lead International partner at RSM UK, comments: ‘Long term, the signs are improving. Our index supports the notion of a relatively improved pace of economic activity in the second half of this year linked to the national distribution of Coronavirus vaccines and a sustained increase in consumer spending near to 6 per cent. Whilst sentiment has been slow to improve, we’d expect to see the index climbing into positive territory over the coming weeks as the ongoing vaccinations progress and the impact of the EU deal moves into view.

‘We have a real concern however around the gaps within the EU deal that haven’t yet been finalised. The financial services industry gets relatively little mention. Unknowns exist particularly around the impact of the non-continuation in ‘passporting’ and the ease of access for UK-based financial services into the EEA. The full impact on the wider professional services sector related to market access and the uncertainty remaining over professional equivalence standards with the EU is also hard to gauge. These sectors are estimated to employ over 2 million people in the UK. Arguably you could say that several key service sectors of the UK left the EU with no deal.

‘Looking to the positives, the travel, leisure, hospitality and retail sectors will all experience marked increases in consumer demand by mid/late-summer 2021 if current projections persist.

‘The uptick in demand in these sectors hardest hit by the pandemic will be driven by an unleashing of pent-up household savings and business activity moving towards a more solid, albeit changed, environment following a successful vaccine roll-out.’

Despite the positives, Hart ends with a cautionary note: ‘Day to day resilience and for many, survival, will still be the priority for many businesses. This will likely be the case until at least Easter when there’s hope of the beginnings of a rebound if business and customer confidence returns.’

54% of brokers undershot their 2020 targets but 44% describe their outlook for 2021 as ‘exciting’

More than half (54%) of brokers and intermediaries responding to the United Trust Bank (UTB) end of year broker sentiment poll indicated that they had undershot their 2020 business projections. Of those, 25% suggested they had substantially missed their targets for last year. However, 23% of brokers indicated that their results for 2020 had exceeded their expectations.

Looking ahead, when asked to choose what word would best describe their business outlook for 2021, a majority (52%) chose ‘challenging’ whilst 44% chose ‘exciting’. The remaining 4% chose to describe their 2021 outlook as ‘worrying’. The survey was carried out in the second week of December 2020.

Over two thirds (69%) of brokers also indicated that moving forward they intend to be more mindful of work/life balance once life returns to some normality with nearly half (49%) wishing to increase their Work From Home (WFH) flexibility.

Increased investment in the digitisation of application and back-office processes also featured highly on the list of areas in which brokers intend to invest, as did a greater focus on teambuilding and developing a strong workplace culture.

Harley Kagan, Chief Executive Officer – United Trust Bank, commented: “The Covid-19 pandemic continues to create challenge and uncertainty but it’s encouraging to see that 44% of property and commercial finance brokers achieved or exceeded their 2020 targets and many are looking forward to this year with enthusiasm.

“At UTB our investment in FinTech, the hard work of our staff and a resolute commitment to supporting brokers and borrowers enabled us to continue to lend throughout last year and to complete record levels of new business in a very challenging operating environment. We continue to deliver quick and reliable lending decisions despite over 90% of our team working remotely and although we’re disappointed that a further national lockdown has become necessary, we’re in a very strong position to face whatever challenges 2021 may bring.

“At UTB we are already planning several new products, criteria and process enhancements and of course further investment in technology in 2021, and our focus remains on supporting our customers and helping brokers to write more business.”

SFP completes sale of A2B Plastics and secures jobs

Nationwide insolvency practitioner SFP has successfully completed the sale of Conwy-based manufacturing and injection moulding business, A2B Plastics Limited, after the company was placed into administration. Most of the 24 employees’ positions will be safeguarded as a result, as well as retaining specialist manufacturing knowledge in Wales.

With a history dating back to 1958 and operating out of its 22,000 sq. ft premises, AB Plastics Limited, used specialist moulding equipment to manufacture bespoke plastic products used in the automotive, packaging, electrical, medical and public sectors including the MoD. As well as manufacturing, it also offered an in-house product design service and achieved a turnover of approximately £1million in 2019.

Following the Brexit announcement and the loss of a major client, the company started to experience financial difficulties. It successfully entered into a Company Voluntary Agreement (CVA) in March 2020 but maintaining the agreed terms of the CVA proved impossible following a downturn in business as a result of the COVID-19 Pandemic.

David Kemp and Richard Hunt, of SFP, were appointed as Joint Administrators on 20 November 2020.

SFP subsequently achieved a sale of the business and assets to Cygnet Plastics Limited, which has managed not only to retain key management, and their specialist knowledge, but also a large majority of the workforce.

David Kemp said: “in such challenging times it was extremely pleasing to achieve a sale of the business and safeguard so many jobs. The purchaser of the business will remain in the trading premises while discussions continue regarding a sale of the Company’s interest in the unit.” he explains.

“Brexit and the Pandemic have caused immense difficulties for many businesses, but by seeking specialist guidance early we were not only able to protect jobs, but also to preserve the expertise of this specialist company and maximise the position for creditors too.”

New restrictions underline need for swift support

The First Minister has this afternoon outlined further tightening of lockdown restrictions in Scotland – including preventing customers from going inside to collect takeaway food or coffee.

Andrew McRae, FSB’s Scotland policy chair, said: “Given the intense speculation ahead of this announcement, many local businesses in sectors like retail and hospitality had feared the worst. While there will be some relief that they can continue to operate, albeit in a very restricted way, the approach of trailing worst-case scenarios in the days before any announcement causes unnecessary anxiety for business owners and disrupts business planning.

“For those businesses that now do need to cease trading, their attention will quickly turn to where they can get financial help and support from government. In doing so, many will find that their business is ineligible or that a fund that could help them has yet to launch. We need all the stops pulled out to get more money out the door and into struggling firms, or run the risk of mass business closures.”

Asset finance market fell by 10% in November 2020

New figures released today by the Finance & Leasing Association (FLA) show that total asset finance new business (primarily leasing and hire purchase) fell by 10% in November 2020 compared with the same month in 2019. In the eleven months to November 2020, new business was 25% lower than in the same period in 2019.

The commercial vehicle finance and business car finance sectors reported falls in new business in November 2020 of 1% and 5% respectively, compared with the same month in 2019. The plant and machinery finance and IT equipment finance sectors reported falls in new business of 14% and 32% respectively, over the same period.

Commenting on the figures, Geraldine Kilkelly, Head of Research and Chief Economist at the FLA, said: “In November, the asset finance market recorded its smallest rate of contraction in new business since the start of the pandemic. This was despite increased restrictions across the UK to deal with rising cases of Covid-19, including a second national lockdown in England.

“UK-wide lockdowns during the first quarter of 2021 mean the near-term outlook remains challenging. The asset finance industry will continue to play a key role supporting business investment during 2021, as evidenced by almost £20 billion of new finance provided to businesses since the onset of the pandemic. This support helped to fund more than 38% of UK investment in machinery, equipment and purchased software in Q3 2020.”

Eight in 10 small businesses start 2021 with resolutions to get in shape for the year ahead

After a challenging 12-months, small businesses resilience has not wavered as we start a New Year. Nationally, 83% of small firms say they have a fresh set of goals in place to secure the growth for the year ahead, according to new Business Barometer research from Hitachi Capital Business Finance.

At a time when the UK has been plunged into a third national lockdown, Hitachi Capital Business Finance asked a nationally representative sample of 1,107 small business owners what they will be prioritising to make their businesses stronger in 2021.

The study found that while intent to secure growth is consistent with levels recorded 12-months ago, plans on how to achieve it have changed. For 2021, small businesses have prioritised plans to focus on their finances and save money in order to reduce the impact of continued uncertainty. Almost a third of survey respondents (31%) said they were planning to strengthen their business by keeping fixed costs down compared to 26% in January 2020. Further, more than a quarter of small business owners (26%) said they were working to build up their financial reserves.

In addition to saving money, January 2021 saw a rise in the proportion of small businesses that were actively putting in place contingency plans in the event of prolonged market volatility (rising from 15% in 2020 to 21% in January 2021).

The research found that small businesses that predicted growth in the next three months were twice as likely to be hiring younger people to train and develop (21%) rather than hiring senior-level, expensive talent (13%). These businesses were also the most likely (20%) to be streamlining and reducing costs by spending time investing in the people who already worked for the company.

The most adaptable sectors for the start of 2021 were manufacturing and retail. In the manufacturing sector, small business owners were most likely (45%) to be focusing on increasing new business income and sales in order to grow. In retail, small businesses were most likely to say they were doing what they could to diversify the business and offer new lines of services (36%).

Joanna Morris, Head of Marketing & Insight, Hitachi Capital Business Finance commented: “After a challenging 2020 which proved to be one of the most unprecedented years in living memory, it is positive that so many UK small businesses have started 2021 with new resolutions to protect and grow their enterprises for the year ahead. Cashflow and cost control are an immediate focus area for many and given the uncertainty of another national lockdown, this is a sensible foundation on which to maximise financial strength.

At Hitachi Capital Business Finance we have remained open for business throughout the periods of lockdown and social restrictions. We have a range of finance solutions to help businesses grow and we are committed to helping small businesses to fulfil their potential and get through the challenges we all face together in the coming months.”

67% of homebuyers want to see the stamp duty holiday extended while half are worried they’ll miss the current deadline

Research by the world’s leading high-net-worth mortgage broker, Enness Global, has revealed to just what extent the current stamp duty holiday in its various forms across the UK has helped boost the market, as well as homebuyer thoughts around missing and extending the current deadline.

Enness surveyed 1,000 current homebuyers and asked them:

  • If they decided to buy a property because of the current stamp duty holiday?
  • If they are worried that their sale won’t complete in time because of the current market backlog?
  • If they think the current stamp duty holiday should be extended?

It’s clear that since the introduction of the stamp duty holiday last year, the housing market has exploded into life with mortgage approvals, transactions and house prices all increasing notably.

However, while the current stamp duty holiday has been largely credited for this, just 25% of homebuyers stated that it was the driving motivation behind their decision to buy, with 71% buying for alternative reasons.

Since the property sector reopened for business, buyers have flooded the market and this heightened activity has caused notable delays and a backlog of sales, largely at the backend legal stages of the transaction process.

With many left in limbo and waiting to complete, it’s no surprise that 48% of homebuyers are worried that their sale won’t complete before the March 31st deadline and they will still be required to pay stamp duty.

No surprise then, that 67% of homebuyers would like to see the current stamp duty holiday extended beyond the end of March.

Managing Director of Enness Global Mortgages, Hugh Wade-Jones, commented: “It’s clear that the opportunity to save on stamp duty has helped to revitalise the UK property market in what have been tough times due to Covid.

“However, for many homebuyers it has been an added bonus rather than the driving factor behind their intent to purchase, with just 25% of buyers entering the market due to the stamp duty holiday itself. This is still quite considerable when you consider there are around one million transactions completed a year and so a 25% boost translates to hundreds of thousands of additional sales.

“Unfortunately, all good things must come to an end and it looks unlikely that we will see an extension beyond the original March deadline.

“With the clock ticking, those yet to complete due to current market delays will be forgiven if an air of panic is starting to set in, having had an offer accepted well in advance of the deadline.

“Perhaps a fair alternative to an extension would be to allow those who have an offer formally accepted prior to the end of March to also qualify for stamp duty relief.”

Survey of 1,001 recent homebuyers carried out by Find Out How (January 7th 2021).

Note – Find Out How includes all responses from the Yorkshire and Humber region within the North East classification.

Rebrand and expansion hails new chapter for PKF Geoffrey Martin

It’s been 40 years since Geoffrey Martin founded the firm that took his name, and now the Leeds and London based restructuring practice is marking a new chapter in its history. From now on PKF Geoffrey Martin will be known simply as PKF GM, while launching a new website, and also expanding its support to regional businesses with the introduction of a new Fraud and Forensics offering to complement its restructuring practice.

It’s the latest evolution for the firm, which six years ago became part of PKF International, a global network of legally independent accounting firms across 150 countries. Over the last 40 years the firm has established a reputation for its empathy and expertise in helping management teams and financial stakeholders to navigate financial challenges.

New fraud and forensic offering

As part of its rebrand, PKF GM has strengthened its advisory offering with recruitment of a fraud and forensic team, led by Robert Brooker, a renowned fraud expert.

Stephen Goderski, Head of the London office at PKF GM said: “I’m delighted to welcome Robert and his team. Their knowledge and expertise will be a real benefit to our clients. Many otherwise successful businesses fall into financial difficulty each year as a result of fraudulent activity. Due to the pandemic, we’re seeing a rapid rise in fraud which looks set to continue into 2021 as more businesses start to struggle and become more susceptible to fraudulent activity.”

“Our values of providing honest, straightforward advice to our clients, while striving to preserve their business, reputation and jobs, haven’t changed. With the launch of our Fraud and Forensics service, we now have the ability to help clients prevent and mitigate the impact of fraud too.”

James Sleight, Head of the Leeds office at PKF GM added: “We’ve got a proud heritage as a firm, particularly in Yorkshire. But we have evolved in recent years, in terms of our leadership, our people and our client reach. We work with clients of all shapes and sizes, from family firms and charities to international businesses and everything in between. Our new identity reflects our ability to bring both a personal, local touch and the wealth of expertise our international network brings.”

“As an independent firm that’s also part of the PKF International network, we have the local, national and global reach to help our clients navigate increasingly challenging times.”

Perfect storm for businesses

The next chapter for PKF GM comes at a time when they’re working to help businesses right across the region to deal with the uncertainty of both the pandemic and Brexit.

James Sleight continues: “It’s undoubtedly very tough out there for many businesses around the country. However, there is a wide range of options and support available to businesses. What we say is this: if you’re experiencing or anticipating cash flow pressure or other financial challenges, don’t leave it too late to explore and understand your options. Having a restructuring professional guide you through the process can be invaluable in getting the best outcome and will also help you understand and mitigate your risk as a director.”

“Covid continues to create difficulties and the Brexit transition will too, but by planning for a variety of scenarios, preparing realistic trading forecasts and having up-front conversations with suppliers, landlords and lenders, firms across the country will be better placed to navigate the challenging months ahead.”

PKF GM has offices in Leeds, London and Gerrards Cross.

Brexit could cost UK exporters £25bn as full Covid recovery pushed back to 2023

The UK’s exporters could face a Brexit bill worth as much as £25bn in lost revenues in 2021, according to a new report by Euler Hermes.

New research from the world’s leading trade credit insurer indicates that Britain’s export-focused businesses will lose between £12.0bn and £25bn (€13.5bn – €27.3bn) this year as a result of weak demand, increased red tape and the depreciation of sterling (-3% forecast for 2021).

At its most impactful, this equates to 1.1% in lost GDP, with mineral and metal products, machinery and electrical equipment, transport equipment, chemicals and textiles likely to be the hardest hit sectors.

The findings, published in Brexiting in times of Covid-19, come as British businesses prepare for the UK enters another recession amid the third national lockdown prompted by Covid-19 and for GDP to dip by 5.5% q/q in the first quarter. Euler Hermes’ economists ultimately expect the pandemic and the Brexit transition period to limit GDP growth to +2.5% in 2021 before a further +7% increase the following year, meaning the UK economy won’t return to pre-crisis GDP levels until at least 2023.

Ana Boata, head of macroeconomic research at Euler Hermes, said: “As expected, the EU and the UK reached a very last-minute compromise on Brexit. However, the deal is far from complete and imposed a transition period on the UK side due to the lack of time for preparation. For UK exporters, the lingering uncertainty has resulted in some disruption at the borders since the start of the year, with many small firms suspending overseas trade for the time being and about one in five trucks being turned away at channel crossings, partly because of Brexit paperwork”.

Euler Hermes initially forecast that €18bn of EU exports to the UK could be lost in the first year following Brexit. The six-month transition period may halve these losses to less than €10bn. Germany (€2bn), the Netherlands (€1.2bn), France (€0.9bn), Belgium (€0.7bn) and Italy (€0.6bn) would continue to be the hardest hit – even if the losses represent less than 0.5% of their total exports.

Ana Boata added: “While the deal is more advantageous than other free trade agreements as it offers zero tariffs for goods, non-tariff barriers could eventually amount up to 10% due to the exit from the Customs Union. Industries like financial services are also still waiting for an ‘equivalence status’ from the EU, which could take longer than the six months planned.

“The Covid-19 crisis provides some leeway for policy support to absorb the negative impact from Brexit through higher infrastructure spending at the border but also measures to preserve purchasing power for UK consumers, but we expect the UK’s GDP to remain -2% below pre-crisis levels at the end of 2022.”

While the figures present a period of difficulty for UK exporters, concerns regarding supply chain continuity are likely to be less severe than previously thought – largely as a result of the pandemic. A recent supply chain survey by Euler Hermes found that UK companies were already seeking to bring their supply chain closer to home, with more than a third (35%) looking for domestic suppliers – a significantly higher rate than in countries including France, Germany and Italy.

However, businesses in import-dependent industries such as automotive and pharmaceuticals can expect costs associated with components to increase by as much as 5% once the new transition period comes to an end in the summer.