Retail woe deepens with closures - Oman Daily Observer

NEWSLETTER - By Andy Jalil, Foreign Correspondent -
The state of the retail sector in the UK seems to have reached a crisis point with several major high street names going out of business in a dreadful start to the New Year. To add to that, looking back over the last few months only, there are many names that come to mind which have had to go into administration or wind up completely leaving thousands out of job.
The specialist camera chain, Jessops, was the first casualty of the new year going into liquidation in the second week with the loss of 2,000 jobs. Following that the iconic music store HMV, whose Chief Executive, Trevor Moore, previously led Jessops, collapsed into administration last week after last minute attempts to save the crisis-hit retailer came to an abrupt end.
It put over 4,000 jobs at risk and signalling the end of 92 years on the British high street. Moore said: "We remained convinced we can find a solution. We know that HMV is a well-loved brand, which has a high level of support amongst the public and we want to ensure that it remains on the high street."
Accountancy firm, Deloitte, which has been advising HMV's consortium of lenders, led by Lloyds Banking Group and Royal Bank of Scotland, its two main lenders — who are owed around a third of its outstanding debt which stood at £176.1 million in November — has been appointed administrator to the beleaguered company and could still find a buyer for some of HMV's stores across the UK. The shops are expected to carry on trading while a buyer is sought with 238 stores, including 16 in Ireland, in the balance.
The same week as the disappointing news of HMV emerged, another household name, Blockbuster, the DVD, video and games rental chain fell into administration causing further high street turmoil. Their losses widened from £8.5 million in 2011 to £11.2 million last year but unlike HMV, they will honour all outstanding gift cards and credits which amount to £400,000.
The company, which has 528 stores across the country with over two million customers, puts 4,190 jobs at risk. However, it is announced that the intention now is to close just 129 stores which would make 760 employees redundant. Retail consultant, Phil Dorrell said: "There are shifts in the marketplace all the time. Blockbusters had a window of opportunity about five years ago to respond to changes in the market and perhaps buy a streaming service and continue to build on their strong brand but they didn't move with the times."
In a space of a week, three major retailers have called in administrators. The failures could lead to nearly ten thousand job losses. The consequences of the administrations threaten to spread throughout the economy. Unless the economy improves, 3,500 high street shops could disappear, threatening 30,000 jobs, according to the Centre for Retail Research.
With major names such as, Comet, JJB Sport, Clinton Cards, Game Group, Peacocks and Black Leisure, among others, that wound up last year, one wonders how much more will the industry suffer. Fortunately some of the biggest failures have been salvaged in some reduced form saving a small number of jobs.
Britain has now seen the slowest growth in retail sales since 1998. Official figures reveal a surprise 0.3.per cent fall even during the recent festive period. Purchases made on-line have also made a very significant impact on in-stores sales. There is further concern on the effect the struggling stores are having on retail property with something like one in ten shops standing empty.
The Chief Executive of Home Retail, Terry Duddy, singled out the punishing impact of business rate rises on retailers. He said that unless the government acted to curb the inexorable rise in business rates — which are higher than rents in some areas — its tax coffers would suffer. The British Retail Consortium has urged the government to "freeze" the rise of 2.6.per cent in business rates scheduled for April, which it calculates will add £175 million to retailers' costs.