More than 300 retailers could go bust after Christmas

Published on Monday 6 October 2008 21:44

MORE than 300 UK retailers are likely to go under in the new year when banks cut off their funding, according to the country's largest insolvency specialist.

Begbies Traynor believes 325 firms could go bust after Christmas. It has placed the companies on a critical list, which means it thinks there is at least a 70 per cent chance of them failing.

It comes after Iceland-based Baugur, which owns chains including Karen Millen and House of Fraser, saw its credit insurance withdrawn amid concerns about the Icelandic economy.

And in the past few weeks, fashion store Miss Sixty and home furnishings firm Rosebys have both gone into administration. Discount retailer Ethel Austin and wedding present supplier Wrapit also succumbed this year.

Retailers usually maximise their borrowing in the run-up to the Christmas period and Begbies says banks will probably give them this period of grace before calling in the debts.

Partner Mark Fry said: "Banks will be very reluctant to pull down any more retailers than they absolutely have to.

"No matter how poor a festive season they have, the banks' position will be better in early January, because at least some of the stock will have turned into cash, which will have reduced the amount owed to the banks."