Retail bankruptcy in Britain increases in 2012

LONDON - The number of retail companies falling into bankruptcy procedures in Britain increased by 6 percent in 2012 compared with the previous year, said global auditing firm Deloitte on Wednesday.

A research of the business advisory firm Deloitte found that a total of 194 retailers entered administration, which means the firms were in insolvencies, in 2012, compared with 183 in 2011 and 165 in 2010.

"These figures are a stark reminder of the difficulties which continue to face the high street," Lee Manning, restructuring services partner at Deloitte, said.

Lee predicted further distress situation for the retail sector next year as constrained household budgets and the structural challenges facing the sector.

Britain's retail sector witnessed several big retail firm entering administration last year including Peacocks, La Senza, Blacks, Game, Clinton Cards, JJB Sports and Comet.

"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 programs, both within and outside of formal insolvency processes.

According to the research, a total of 1,833 businesses went into administration in Britain in 2012, compared with 2,010 last year, a fall of 9 percent.

Almost all of the sectors tracked in the Deloitte analysis saw a decline in the number of business failures last year, including some of those sectors most affected by the economic difficulties of the past five years.

However, other sectors beside retail which underwent notable increases in insolvencies include financial services, up from 30 to 47, and the mining and energy sector, up from 22 to 28.