Latest high street blow and return of Crown Preference
This week so far brings Debenhams and Arcadia double collapse and the reintroduction of Crown Preference.
HMRC is likely to miss out on big chunks of revenue from Sir Green as the choice of the administration date was not coincidental, November 30th is the last day before Crown Preference returns. However, the retail sector expects further insolvencies directly following the insolvency regime change.
Is this the end for British high street?
Skyrocketing rent arrears Following a ban on evictions, the commercial rent arrears have grown by £1.5bn every quarter in 2020. If the moratorium does not get extended, hospitality and retail businesses might get decimated in January 2021.
And while the Government offered support through furlough scheme, grants and VAT, rent being a fixed cost, remains negotiable directly between landlords and tenants.
Changing retail landscape
Large and expensive store estates are no longer attractive. A collapse in rental values accelerated by the intermittent lockdowns means that the current system is no longer sustainable.
And with the onslaught of online trading, and changing demographics, we are about to witness the most profound change of the town centres in decades. Sadly it is likely to be sealed with massive losses of employment.
According to data from the Centre for Retail Research, job losses are expected to rise further to 235,704 by the end of the year.
Seeking help earlier
Are you worried about your business survival under the new tier system? If your business is struggling and you need help with understanding your options, please don’t put it off. Contact us for a free chat on 0800 118 2948.
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