The latest PwC analysis into corporate insolvency numbers in the
West Midlands demonstrates that the decline in the level of
corporate insolvencies continued in Q4 2011.
In total, 389 West Midlands companies became insolvent in the
final quarter of last year, down from 435 in the previous quarter -
an 11% decrease. Nationally, the number of corporate insolvencies
fell by 7% over the same period. However, based on a comparison
with the same quarter in 2010, the number of insolvencies
nationally was 4% higher.
Nationally, the retail sector is among those worst affected,
seeing a 12% increase in insolvencies in the last quarter of 2011
compared to the last quarter of 2010. However, the number of
insolvencies in the sector was slightly lower in Q4 2011 compared
to the previous quarter - showing a fall of 2%.
Matthew Hammond, partner in the business recovery services
practice at PwC in the West Midlands, commented:
"Despite the relatively upbeat reports coming from retailers
about trading performances over Christmas, we have seen some High
Street casualties and there may well be more to come as the true
cost of pre-Christmas discounting impacts on profit margins.
"PwC's research has shown that in the week before Christmas, 76%
of 100 high street retailers were on sale or advertising promotions
in their shop windows. Whilst this is only slightly ahead of the
norm, the level of discounting was much deeper than usual and this
will have eroded margins.
"The sector is facing an extremely challenging period. Some
retailers have already had to sustain a significant drop in
customer spend and profits and 2012 is going to be another
difficult year. If they experience difficulties, they should not
put off contacting professional advisers who can advise them of
their options and in some instances, suggest recovery
strategies."
Which sectors are struggling the most?
Nationally, the worst affected sectors continue to include
construction (656 companies), manufacturing (394), retail (447),
hospitality & leisure (375) and real estate (123).