North East retailers are looking forward to a happy and successful Christmas after new research showed a drop in the risk of insolvency they faced over the last three months, according to new research by insolvency trade body R3.
The proportion of North East retail companies with a higher than normal risk of insolvency has dropped by two per cent since September.
The North East retail sector is now in the most stable position of all its peers across England, and with Christmas around the corner, further improvement is hoped for through the rest of the year and into 2016.
The new R3 research also showed a substantial improvement in the fortunes of the North East professional services sector during 2015, with its insolvency risk falling by nine per cent in the last three months.
Figures released recently by the British Retail Consortium showed that UK retail sales in October has actually decreased 0.2% on a like-for-like basis from the same month last year, while total sales were up only 0.9%, against a 1.4% rise in October 2014.
Allan Kelly, chair of R3 in the North East and a partner with RSM, says: “The last quarter of the year is traditionally the time when retailers make their money, and it’s encouraging to see that, while the High Street isn’t yet feeling the Christmas spirit as much as retailers might like, the North East retail sector is making some positive progress.
“Retailers’ performance in the run-up to Christmas is absolutely vital in not only finishing off the year well, but also securing the resources they might need to get them through the traditionally quieter times once any New Year sales finish, and with the traditional Quarter Day on which commercial rents are paid falling over the coming festive period, it’s vital that they make hay while the snow falls.”
Every month, R3 uses research compiled from Bureau van Dijk’s ‘Fame’ database of company information to track the number of businesses in key regional sectors that have a heightened risk of entering insolvency in the next year.
Elsewhere in the research, the North East transport/haulage sector has recorded the lowest such risk of any of the 12 UK regions for the ninth consecutive month, while its restaurant sector also now sits on top of the list as the most stable of its peers in the UK.
On the downside, the North East construction sector is still only faring better than its peers in Northern Ireland, while the hotel and manufacturing sectors recorded month-on-month rises.
Allan Kelly continues: “The North East’s professional services community went through a difficult time during the economic downturn, and at the start of this year, it still didn’t seem to be in a great position, but its consistent improvement during 2015 has been marked and it will be facing the coming 12 months with much more optimism that was probably the case this time last year.
“Despite the economic picture in the region generally continuing to improve, issues can arise for any business in any sector at any point, and seeking advice from a qualified source such as an R3 member as soon as any problems start to become apparent is the best way to address and resolve them.”