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New Year could see 'insolvency bloodbath' on the high street

Published on 1 Dec 2009 under category: legal

The number of businesses seeking out commercial litigation advice looks set to soar over the next few months as retailers brace themselves for a New Year's 'bloodbath'.

That is according to the Association of Business Recovery professionals, R3, which has predicted that as many as 20 big-name high street retailers are set to go under over the first few months of 2010.

A new report from the body has stated that a repeat of last year, where 22 well-known retailers went into insolvency, is more than likely.

The study also has warned that, while the economy is starting to recover after the global downturn, this is unlikely to help retailers and could in fact work against them as insolvency organisations become more aggressive in their efforts to claim assets rising in value.

Peter Sargent, president of R3, concluded: "Rising unemployment and decreased spending in the lead up to Christmas coupled with heightened creditor aggression in the New Year leaves the retail sector facing another bloodbath."

This comes in the same week that Borders has gone into administration.

If you require advice on Insolvency and Bankruptcy, please call us on +44 (0)20 7831 0101 and ask for Katherine Sillett.