Around half of all retail companies – and the jobs they provide – are saved through the corporate recovery process when things go wrong, according to R3.
The Association of Business Recovery Professionals places the survival rate of stores at 48%, while 53% of jobs are preserved through corporate recovery and insolvency advice.
President Lee Manning says: “The UK’s insolvency regime has improved since the introduction of the Enterprise Act in 2002, with a greater flexibility introduced for the administration process, which has enabled more jobs and businesses to be saved.”
It’s worth noting, too, that the figures relate not to the long-term climate, but specifically to the past 18 months, when the retail sector has faced particularly challenging times.
For employers worried that seeking administration advice might mean making staff redundant, it’s a timely reminder that insolvency advice is not just about saving the company, but also about protecting its workforce.
Indeed, if the firm is to be sold on as a going concern, it can be important for administration advice to take into account the skills of its existing workers, who can represent a significant asset in their own right.