Store closures set to hit 10,000 mark

The sector is under mounting pressure from a combination of subdued consumer spending, intense price competition both online and offline, and high taxes, such as business rates. The CRR predicts that 10,000 stores will shut this year, of which half will be independents. In 2008, 5,793 stores were closed with the loss of 74,539 jobs.

According to its research, more than 1,900 sites were closed over the first seven months of the year, with the loss of 21,355 jobs. CRR director Professor Joshua Bamfield warned that the pace of closures and job losses will accelerate, with the quarterly rent bills that are due in September expected to trigger a fresh wave of business failures.

Bamfield said: “The first 100 days of this year saw more shops close and employees sacked than the whole of 2017. This year is shaping up to be the worst since 2008, with House of Fraser going into administration, We expect 10,000 stores to close by the end of the year and this will be a turning point for many retailers, the ones that survive.

“Half of those closures will be independents, the number of failures will ramp up in the latter part of the year.”

On a dramatic Friday, House of Fraser became the biggest high street casualty since Woolworths when it collapsed into administration. However, within hours Sports Direct announced that it had bought the business for £90million.

The sportswear and equipment retailer, which is controlled by billionaire Mike Ashley, has not set out its plans for House of Fraser, but it is believed that it will close its loss-making sites. Prior to its collapse, the 169-year-old department store chain had planned to close 31 out of its 59 stores, which would have resulted in 6,000 redundancies. House of Fraser employs 17,000.

This week DIY giant Homebase is expected to add to the growing tally of store closures and redundancies, when it unveils plans to turnaround its business after a disastrous spell under Australian ownership.

It is believed that Homebase’s owner Hilco, the turnaround group, will use an insolvency procedure called a company voluntary agreement to close around a quarter of its 249 stores. That would result in up to 2,000 of its 11,000 workforce losing their jobs. In May Australian group Wesfarmers sold Homebase for £1 to Hilco, just two years after buying it for £230million and in the process, locking in losses of more than £1billion.

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