Some 19 per cent of fashion retailers are showing early signs of financial distress according to accountancy firm Moore Stephens following its recent analysis of 35,078 UK businesses. The combined combination of rising overheads, falling consumer spending, and increased competition have hit those with retail estates hard and the problem is not, by any means, confined to the UK alone. No one can be oblivious to the struggles being faced by department stores Debenhams and House of Fraser, nor to the “issues” surrounding the Steinhoff group. With Bunnings having caught a cold with its Homebase acquisition and East in administration, it is prudent to expect more bad news across the retail sector.
In the USA “right-sizing” has been the name of the game this past 12 months. Currently retail giants like JC Penney are rationalising distribution operations to shed overhead and 670 jobs – Walmart is eliminating layers of management, and even Amazon is cutting staff numbers. Stores across all states are being closed leaving many malls peppered with empty units which is resulting in even further reductions in footfall. Many pundits in the US market are bracing themselves for further retrenchments and Chapter 11 administrations.
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