Failing high street shops may be indicative of a greater need for business restructuring

Failing high street shops may be indicative of a greater need for business restructuring

Failing high street shops may be indicative of a greater need for business restructuring, warns Haslers Chartered Accountants

A team of insolvency specialists at Loughton-based Haslers Chartered Accountants have said that a lack of change amongst some of the UK’s largest retailers may have been behind their downfall.

In recent months the UK has seen a number of large high street names go into administration or close completely. Maplins, Toys R us and BHS have all been forced to close their doors after recording poor results, but the insolvency experts at Haslers say more could have been done to save the firms if they had acted sooner.

“With the changing nature of retail many of the firms that have failed recently simply didn’t keep up with trends with online retail or were simply priced out of the market by competitors,” according to Dominic Dumville, Insolvency & Recovery Partner at Haslers.

“That is not to say that they couldn’t have potentially reformed their operation had they acted sooner, but that is always easier said than done in hindsight.”

Dominic said that many retailers had taken steps to restructure their operation in recent months, including the likes of Carpetright, who have used a company voluntary arrangement (CVA) to create a breathing space from creditors in which they have been able to reorganise their operations.

He said: “CVAs and other forms of restructuring can be a very effective tool for a business if they are starting to show signs of weakness or where they need to review their core approach to the business.

“Broadly speaking, a business restructure allows a company to reorganise its debts, close unprofitable areas of the business and sell off non-essential assets in order to keep the company functioning long enough to make the fundamental changes it needs.”

Dominic stressed that no form of insolvency procedure should be taken lightly, but argued that the basic forms of restructuring could play an important role in securing a business’s future.

“Appreciating early on that there is fundamentally something wrong with a current business model and using restructuring as a method to reorganise the business is something that more companies should consider.

“Choosing this option should not be seen as a form of defeat. As the world around us changes so do the goals of businesses and the expectations of their customers. If a company is not sufficiently solvent enough to make the changes it needs, then restructuring with the assistance of an insolvency practitioner can be a useful way of starting afresh, while still holding on to the goodwill built up in the brand.

If your business is considering a restructuring process or would like to learn more about Haslers expertise in business recovery and turnaround, please call 020 8418 3333 or visit www.haslers.com/services/insolvency/

Failing high street shops may be indicative of a greater need for business restructuring