Trouble at Poundland, Claire's, River Island, Hobbycraft and New Look are the latest big names hitting the headlines - what does this tell us about the High Street and, more importantly, the wider economy? Here we explore what it might be indicating.....
As we head towards autumn, there is a clear sign of retailers plotting their path to Christmas – tubs of Quality Street already on shelves, hoping to attract early ‘Christmas’ sales is nothing new. But what themes are we seeing from the High Street – often an indicator of sentiment across the wider economy.
This week, we saw Poundland receiving approval from the High Court for a formal restructuring plan. The retailer announced its struggles earlier this year and it has taken until now for it to reach the courts.
This formal route is fairly new and is designed to help businesses avoid formal insolvency processes. To date, the process has been used a few times, due to the costs, time and expertise involved.
On accepting the Poundland restructuring plan, the Judge stated “I will sanction the plan. I will give my reasons later” – a clear sign of the need for speed to get the plan in place, without the Judge having to provide comprehensive remarks about its acceptance. Often something not appreciated in an insolvency/restructuring process, is that time is always of the essence – wages and bills need to be paid and there’s no time to hang around!
The Poundland restructuring plan sees significant investment into the business but will still result in more than 68 store closures and significant job losses. The personal impact of the plan is not trivial and will affect many people’s lives – something that is often forgotten/lost in these sorts of cases. The wider impact on the supply chain will also be felt, for example distributors no longer required for those discontinued lines.
Not shying away from other pessimistic reports affecting retail and the wider insolvency sector, Claire’s, River Island, Hobbycraft, New Look, to name but a few, are all undergoing their own restructuring/insolvency processes.
Economic challenges, including the National Insurance increases, the anticipated cost of the 2026 business rate revaluation exercise, the wider impact of cost challenges of preparing for, or managing, IT outages/cyber attacks to name just a few issues, are mounting pressure on retailers.
As autumn unfolds, we don’t expect strains to ease for retailers and, more importantly, other/wider business sectors. The way business owners react and adapt to change is fundamental to success and failure – one of the key opportunities for business owners is to be more open-minded and facing challenges early. The earlier owners discuss, consider and plan for challenges, the more likely they are to be able to help their businesses adapt to enable survival. This includes being on top of cashflows and understanding the operational side of their business – that can only help owners give their businesses the best chance for future success.
As always, we will be watching closely to see what common themes are occurring as we head to the end of 2025.