Discounted clothing retail sale

A recent study carried out by the insolvency trade body R3 in conjunction with BDRC Continental appeared to show that the picture was worsening for businesses across the UK, with fewer companies now reporting growth in comparison to earlier in the year.

The findings of the report highlighted that as of September 2017, 53% of businesses had reported one or more signs of growth. This figure saw an 11% decrease compared to the figure recorded in April this year, where 64% of businesses had reported some sort of growth. In fact, what made this figure more alarming was the fact that it was the lowest percentage of reported business growth since July 2013. The most common reason for signs of distress emanated from ‘Decreased sales volumes’, which was reported by the greatest proportion of firms surveyed, at 12% - up from 7% in April 2017. The number of maximum overdrafts being used by firms each month also increased, a figure which jumped up by 4% compared to this time last year.

The main contributor to this seems to be a fall in sales volumes for a number of companies, resulting in them reaching to the limit of their financial facilities. As a result, there appears to be a dark cloud shrouding the economic picture for many, and things remain precarious for some who appear to be existing on the edge. In fact, it could simply come down to any one of the following factors to trigger a major issue suddenly, such as the rise of the cost of borrowing, the failure of a major supplier or customer or a fall in customer confidence. These reasons alone could ‘steer the ship in to difficult waters’ and push a business into insolvency.

Adrian Hyde, President of R3 said:

“There’s been a very firm increase in distress levels over the past 18 months, alongside a drop-in growth. Businesses have moved on from record high growth levels and record low distress levels, and it looks like a new phase of the economic cycle has started”.

In addition to this, Mr Hyde went on to comment that due to the number of costs facing business such as minimum wage and business rates, it is no surprise to see an increase in the number of enquiries from directors at businesses which are worried about their options.

Yet, despite these fears, the sooner you are able to identify signs of distress for your business, the more options you have to sort this out. It is crucial to seek regulated advice within the insolvency and restructuring profession, and it is here where SKSi can assist company directors to make the best choices for their companies. We cannot stress the importance of reaching out for expert advice from regulated professionals, as more can be done to provide the best possible outcome for a firm showing any signs of distress.