Retail

The retail sector has experienced major financial challenges in recent years

In recent years, retailers have faced significant increases in overheads which have been driven by hikes in business rates and the rising cost of imported goods driven by a weakened pound. They have faced significant challenges from online retailers, who many consider receive preferential tax treatment, and are more price competitive. High street retail sales have fallen, and Brexit has also been disruptive. As a result, a number of well-known high street brands have collapsed, and there has been a significant rise in the use of company voluntary arrangements (CVAs) to restructure businesses.

Background

Acquisitive retailers who have demonstrated immunity to the problems on the high street have been able to acquire distressed competitors and complementary retailers at very advantageous terms. Retailers who have strong online sales channels and those on the high street who have invested in, and developed clear as well as attractive brand propositions, have a target audience who identify with their brands in addition to a demonstrated immunity to the onslaught on the high street.

Outlook

Despite the unprecedented conditions experienced on the high street in 2018, optimism remains and retail sales during the Christmas period was not as bad as previously anticipated. Looking ahead, whilst some uncertainty around Brexit lingers, the macro-economic outlook is generally quite positive suggesting that consumer spending may increase. However, retailers with somewhat weak balance sheets will need to be extremely careful about how they manage their businesses in the near future.

How Quantuma can help

We have a leading multidisciplinary retail sector group who have undertaken a wide range of assignments for retailers. Our team have acted for a very large used vehicle retailer facing a compulsory purchase order, we advised the directors of ladies’ fashion retailer, Genus UK T/A Select, on their CVA proposals, which received significant support from creditors and saw the rescue of approximately 2,000 jobs, and we also advised the directors of i-Vapo, a UK-wide leading e-cigarette business on an accelerated sale. Quantuma has also acted as joint administrators of a UK-wide department store beauty concession, securing a sale of the business as a going concern, acted as joint administrators of Orla Kiely Plc and two subsidiary companies, acted as compulsory liquidator of Store 21, a discount chain operating from 122 sites across the UK, and advised the directors of a leading lifestyle business on an accelerated sale.

Our retail sector group brings together the right combination of expertise, allowing us to work successfully alongside businesses and their financial stakeholders. This enables us to offer specialist advice and deliver the best outcomes for clients. Together with our combined experience, collective insight as well as deep sector knowledge, our offering is unrivalled and we pride ourselves on acting quickly and independently. This means that directors and their stakeholders gain the right advice when it is needed, receiving partner attention throughout the course of the assignment.

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