- 14 Dec 2022
- 2 min read
Ding Dong Merrily on High (Street)?
Christmas. A time for peace on earth, goodwill to all mankind, and in past years, a last chance for many high street retailers to make significant sales before the end of the year.
Instead, in the last year, we have experienced a period of conflict in Ukraine, strikes, mankind worrying about increasing fuel bills and England being knocked out of a December World Cup.
Is there a new trend emerging in high street retail around this time of year, or is this year’s (lack of) business good cheer a result of the currently harsh economic factors?
UK fashion chain M & Co Trading Limited has very recently gone into administration and Teneo appointed as its Administrators. The company, with 1900 employees and 170 stores in the UK, gave the main reason for its current downfall as a jump in costs at a time when customers were short of cash and pulled back from spending, resulting in increased pressure on cash flows and trading losses. The company continues to trade, and its Administrators aim to pursue a sale “in an accelerated timeframe”. This view may be realistic if it is able follow the path of Joules and Made.com, which went into administration in November and were bought by Next PLC for £34 million and 3.4 million respectively.
The future may not be so bright for M & Co. Despite a very loyal customer base, its current fall into administration follows its administration in the summer of 2020, caused in the main by the Covid-19 pandemic’s effect on its business and a subsequent sale back to the family which founded the business in 1961.
We all hope that the process of administration, which has allowed the company to continue to trade and preserve the company as a going concern for a hopeful sale, will preserve most of the 1900 employee’s jobs.
Whilst many retailers may have been affected by the very unusual and hopefully extraordinary yet unforeseeable set of economic factors, including the impact of Covid-19, the war in Ukraine and cost of living crisis, it may be that retailers can no longer rely on the Black Friday sales and Christmas/ New Year sales uplift to survive, together with the same level of optimism as an England football fan.
In the recent published insolvency figures for 2022 Q3, after seasonal adjustment, the number of companies falling into insolvency was 40% higher than in the previous year (albeit when government support packages were still in existence) but more tellingly similar to the 2022 Q2 figures, which at the time represented the highest number of insolvencies since 2009.
Let’s all hope that the fate of M & Co follows Joules in continuing as a brand employing significant numbers of employees all over the UK, and that its fate does not become as predictable as an England World Cup exit as a result of a missed penalty.
To speak to one of the team you can get in touch here or call us on 0800 2800 421.