As the economy emerges from the recession, retail administrations dropped to their lowest figure since 2007, according to research by business advisory firm, Deloitte. There were 290 retail administrations in 2009, a drop of 11 per cent compared with the 327 seen in 2008, while up 4 per cent on the 2007 low of 277.
Retail administrations steadily declined throughout 2009, with the spike of Q408 and Q109 at 111 and 124 administrations respectively, down by almost half in Q209 to 63, dropping further in Q309 to 56, and yet again to 47 in Q409. Quarter on quarter, administrations were down 58 per cent in Q409 from Q408.
Dan Butters, partner in the reorganisation services practice in the Leeds office of Deloitte, commented: "The steady decline in retail administration figures is encouraging, particularly now as we begin to emerge from the recession. There are a number of factors which have been at play here. Reported consumer spending has held up far better than expected. Equally, retailers have responded well to the recessionary environment, and have better managed their cash flows and stock levels. This has been reflected in less aggressive discounting strategies, which have in turn helped to maintain profitability. We are aware of several successful CVAs in the sector, as well as a number of informal agreements by retail landlords that have enabled the trading of more marginal high street retailers to continue. We continue to expect an increased use of retail CVAs as a successful alternative to administration."