Gloomy report predicts half of UK’s non-food retailers could go bust by September

But ICSM Credit's lifeline could help prevent many from going bust

A report by Retail Economics and Alvarez & Marsal (A&M) paints a gloomy outlook for retailers this summer as a result of core financial problems and the coronavirus shut down.

The report has found that more than half of this country’s major non-food retailers will deplete their entire working capital should the COVID-19 lockdown continue through the summer.

Published in the on April 8, the report states: “Large multiple retailers were under significant pressure going into the crisis, driven by a legacy of inflexible lease structures and changing shopping habits. Five out of the 34 major non-food retailers analysed already had negative cash flow at the outbreak of the pandemic, a possibility even for large, profitable companies that rely on credit and capital markets to fund investment, growth, and shareholder returns.”

The report shows that a 10% reduction in sales would have resulted in over two-thirds of major U.K. retailers falling into negative cash flow. But sales are forecasted to have dropped as much as 70% since the lockdown tipping every retailer sampled into immediate negative cash flow.

It continues: “Analysis by A&M and Retail Economics suggests that near-term liquidity over an initial three-month lockdown period is manageable for most large retailers. Should the lockdown persist into the summer, working capital demands will intensify and large parts of the sector will be decimated as swathes of retailers seek additional funding in order to survive.”

Help for retailers and all businesses during the lock down

Ian Carrotte of ICSM Credit said the findings were depressing but realistic with many retailers in trouble before the coronavirus crisis. He said: “The pandemic will have lasting effects on how people live and shop with online growing as habits set in. It will also mean more business to business will be online. In the meantime it is essential to pull up the drawbridge and urgently cut costs and chase down overdue invoices.”

He said ICSM Credit’s free temporary membership and free legal letters to help firms get paid money they are owed during the crisis was proving popular.

“Most firms are paying their bills if chased – something ICSM Credit is good at with our debt collecting department – but we are also offering free temporary membership and legal letters which mean struggling retailers and any business can use ICSM for free and recover debts to help them through the lock down,” he said.

Retailers covered in the report:



 N Brown Group




 Pets at Home 


 Photo Me

 Card Factory 




 Dixons Carphone

 Shoe Zone


 Stanley Gibbons Group

 Fraser Group

 Studio Retail Group 

 French Connection 


 Games Workshop

 Ted Baker 


 Topps Tiles 


 Travis Perkins 

 JD Sports

 United Carpets 

 John Lewis of Hungerford

 Watches of Switzerland

 Kingfisher Group

 WH Smiths

 Moss Bros Group



Picture: Retail Gazette

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