Retail has had a very interesting couple of years, thanks to the Covid-19 Pandemic. On the one hand, physical shops on the high street and shopping centres have suffered, whereas online sales have experienced an unprecedented boom. According to a report by PwC, almost 50 shops a day closed in the first half of 2021, with fashion retailers the most affected. Meanwhile, total online retail sales growth for 2020 was up 36% year-on-year, the highest annual growth since 2007, according to the IMRG Capgemini Online Retail Index.
The decline of the high street was an issue long before the pandemic began, with climbing business rates, expensive rents and declining consumer footfall leading to increasing closures year on year. Government mandated lockdowns, social distancing rules and staffing issues have been the final nail in the coffin for many retailers. Many such closures hit the headlines, with big names such as Arcadia Group, Mothercare, Beales, Cath Kidson, Oasis, Warehouse, Evans and TM Lewin all disappearing from the high street in 2020.
Whilst there have been grants available and the furlough scheme as means of support, retailers have still struggled with supplier issues, rising stock prices, premises rent and rates, repayment of loans and growing competition from online platforms.
The assets that a bar or restaurant can own are included but not limited to: retail stock, shop fixtures and fittings, furniture and décor, vehicles, trademarks and branding, websites and social media accounts, customer databases and goodwill.
Retail instructions often come hand-in-hand with very tight timelines. There are usually rent and rate arrears that mean we have to value and sell the assets and clear the site in a matter of days and hand the property back to the Landlord. Monthly as opposed to quarterly rental periods are more common in retail than other sectors. We try and work with Landlords to try and find the best solution with all parties and have previously taken on short term rental agreements to continue occupation and give us more time to sell the assets.
Despite costing a fortune to source and supply from new, second-hand shop fittings are extremely difficult to sell. This is largely down to their bespoke nature, but also due to the costs of removal, storage and re-installation. Furniture and décor is more readily saleable, to both dealers and end-users who are looking for one off pieces.
Stock, on the other hand, is usually a great asset in terms of saleability. It does of course depend on what it is, how old it is, what condition it is in and how much there is of it. It’s not something we struggle to find buyers for, and we have achieved as much as 60-70% of cost price! Limiting factors on value are the costs of removal and storage, potential inaccuracy of stock lists and the fact that it is sold without warranty or guarantee, without any rights of return.
We expect retail to be extremely prevalent in the insolvency statistics for 2022 and are geared up to handle the ever-expected wave. We can handle the case from start to finish, from initial site visit and inventory, through the valuation and disposal, to site clearance and handing back the site to the Landlord in a time and cost effective manner. We can also carry out desktop valuations of stock and assets and provide marketing advice and valuations on retail properties.
If we can be of assistance to you or any of your clients, please do not hesitate to get in touch on 01425 200366 or op@proudleassociates.com
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