The number of retail administrations in the first quarter of 2012 has increased by 15% to 69 compared, according to research by Deloitte.
Retail administrations in the first quarter of this year increased by 64% on the previous quarter, when 42 retailers entered administration.
Deloitte added some retailers may have to reduce their property portfolios by up to 40% in the next five years and adapt to meet the changing demands of consumers.
Lee Manning, restructuring services partner at Deloitte, said: “Whilst the quarterly rent day often sets the timing for the insolvency, a significant trigger in a number of recent administrations is that many retailers have too many marginal stores.
“In order to remain competitive, some retailers will need to rethink their business models to be nimble and adaptable to changing consumer trends. A fast-changing retail environment will require certain businesses to reassess their store portfolios, not as a matter of choice, but in order to survive.”
He added: “The first quarter of 2012 is particularly significant given the high profile nature of the companies we have seen enter administration: Peacocks, Game, La Senza, Blacks and Past Times. The number of job losses that came as a result of these administrations was almost 10,000 out of the 22,000 employed by those companies. In contrast, Q1 2011 saw far lower levels of job losses. Overall, for 2011 and the first quarter of 2012 the largest 15 retail insolvencies had 2,800 stores and only 1,350 stores have survived; an attrition rate of 52%.”
Overall, the number of companies falling into administration, excluding retailers, in the first quarter of 2012 declined by 10%, from 497 in quarter one 2011 to 447.