RETAILERS have been warned they face a “Christmas Day bloodbath” of closures and insolvencies as they get set to meet crunch quarter-day rental payments to their landlords today.
The British Retail Consortium played down fears that today’s payment round would repeat the carnage of June when big retail names like Habitat were forced into administration because they could not pay their rent. But it warned it was only delaying the inevitable.
“There is a less of a danger point now,” said a spokesperson. “Many retailers are still struggling and seeing sales fall but they and their creditors will hang on in expectations of better Christmas trading. For lenders to push retailers out of business at this point would be premature.”
The BRC said a delay could be the “saviour” of some retailers as they benefit from a Christmas sales uplift but for many retailers relying on a revival in consumer confidence results will fall short.
“For many it will still be tough,” the spokesperson said. “The next payment is due on Christmas Day and it will be a day of reckoning. We could see a bloodbath of closures then rather than now.”
Retail analyst Nick Bubb of Arden Partners said: “The banks are unlikely to pull the plug on any major high street chains at this point with Christmas only three months away but this is an awkward time for the sector.”
Analysts at Verdict Research said smaller retailers would be in most danger this month as they were particularly hard hit by low consumer spending, high inflation and the summer riots. “There is a risk that many will go under,” said lead analyst Sarah Peters.nsolvency trade body R3 warned: “This month’s deadline could spark another wave of insolvencies. We have seen little sales improvement since June.”
Quarter-day rentals date back to medieval times with rent days falling on religious festival dates such as today’s Michaelmas and Christmas Day.