Pictured: John Kelly
Under-pressure fashion stores may be tempted to "window dress"
their figures, an expert has warned.
John Kelly, regional managing partner at the Birmingham office
of corporate recovery specialists Begbies Traynor, said the sector
was directly in the firing line of the economic downturn as
consumers reined in their spending or shopped online.
He urged the fashion world to be realistic and face up to their
problems.
"Buying market share and price cutting below cost price rarely
work in the long run. As you may expect, it can often increase the
risk of failure.
"That said, keeping and valuing obsolete fashion stock may
support a balance sheet but will eventually be found out. Cash is
still king and much better to 'move on' and realise the cash
value.
"Fashions rarely return in the short term - as my wardrobe will
confirm!" said Mr Kelly.
According to Begbies Traynor's most recent Red Flag Alert
benchmark, general retailing is facing a 26 per cent jump in
critical financial distress annually.
Troubles on the High Street have in recent months claimed female
fashion group Peacocks, affiliated company Bonmarché,
lingerie chain La Senza, gifts retailer Past Times and outdoor
supplier Blacks.
Mr Kelly said: "I very much doubt we have seen the last of the
blood-letting. With the economy flirting with a double-dip
recession trading won't be getting any easier in a hurry.
"Trying to hide the pain will in the end only make the situation
worse. My advice would be - seek help at the first sign of
trouble."
For more information about Begbies Traynor, please visit their
website here: www.begbies-traynorgroup.com