Quantuma partner, Chris Newell comments on the challenges faced by the traditional high street and actions that UK retailers can take to protect their businesses in this period of uncertainty.
Quantuma partner, Chris Newell comments on the challenges faced by the traditional high street and actions that UK retailers can take to protect their businesses in this period of uncertainty.
The uncertainty around costs of trading on the high street has led to a string of high-profile administrations, from House of Fraser to British Home Stores (BHS). Just last month, Quantuma’s Andrew Andronikou, Brian Burke and Carl Jackson were appointed administrators at womenswear retailer Genus UK, which trades as Select. We advised and were successful in securing a Company Voluntary Arrangement (CVA).
A CVA has often been the best form of rescue plan for retailers that enter administration, creating a legally binding agreement between an insolvent limited company and its creditors. The arrangement enables the insolvent company to repay a proportion of its debts over an up to five-year period, and often includes a reduction in operating costs to help the business get back on its feet.
In order to avoid these processes, retailers should take professional guidance to ensure that their accounts are accurate, factoring in business rate and wage increases to avoid unexpected financial troubles. Further, brands should keep their eye out on market trends and learn from the downfall of companies who failed to stay ahead of the curve. When competing with online retailers, cheaper alternatives and similar brands in a competitive market, retailers must make their customers’ experience memorable and unique, encouraging ‘dwell time’ and therefore purchases.
