Stark Warning from Retail Veteran
- Written by The Insolvency Team
We have said before that the need to start repaying CBIL and BBL debts was going to impact businesses across all sectors and the latest report from retail veteran Bill Grimsey is a stark warning of the state of the independent retail sector.
His report estimates that independent retailers using Covid support loans have accumulated debts of £1.7 billion which is four times the amount of the prior year. He is also of the opinion that many of the independents that took out these loans would not have been able to secure standard bank lending as they were not financially stable before the pandemic.
There is a growing movement to shop locally and support the independents which will obviously assist these businesses but if Bill’s assumptions are right then it is likely that we will see many more empty shop units across the country.
To add to retailers woes, the latest inflation figures have put pressure on the Bank to consider an interest rate rise. The mere mention of this could well cause many consumers to think twice before spending in fear of a rise in their mortgage costs.
Any decline in retail will also have a knock on effect for commercial landlords who potentially will be looking at falling demand for units and mounting lease and service charge arrears. None of this makes for happy reading and what, if anything, the Government will do to support these businesses remains to be seen.
Whilst the future looks uncertain, what we can say with certainty is that businesses that seek advice earlier have a better chance of a successful outcome than those that ignore the warning signs. This applies across all sectors and all businesses and so we would urge that businesses owners and commercial landlords contact us with any concerns for an initial zero cost assessment.