Nearly half UK's fashion retailers financially vulnerable, data suggests

30 December 2016 - Janet Bird

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Almost half of Britain's fashion retailers are financially vulnerable, new data suggests.

Figures compiled by turnaround experts Opus Restructuring reveal that a startling 43.6 percent of the UK's 9,154 fashion retailers are deemed to be in a position of financial risk.

Using Company Watch's corporate health scale to score the UK's fashion retailers, Opus found that 3,991 rated less than 25 out of 100 and, as such, could reasonably be expected to face formal insolvency or require major financial maintenance in the next few years.

Opus revealed profits for the larger high street fashion retailers have plummeted 28 percent when compared to two years ago, while their borrowing levels have risen 11.6 percent during the same period. Smaller independent retailers are expected to be in even greater trouble.

The growing demand by consumers for ever greater discounting and the post Brexit fall in the value of sterling, which has increased import costs and impacted profit margins, are believed to be major causes of the financial challenges now facing the fashion industry.

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