The latest PwC analysis of corporate insolvency numbers shows that the retail industry is significantly worse off than this time last year, with a 10.3% increase in retail insolvencies in the second quarter of 2012 compared to the same quarter of last year. There were 426 insolvencies in the retail sector in the second quarter of 2012 compared to 386 a year ago.
Overall, there were 3,927 corporate insolvencies across all sectors in the second quarter. This number is 11% down on the first quarter of 2012 (4,406 companies) and 3% down on the same quarter in 2011 (4,055 companies).
Mike Jervis, PwC business recovery partner and retail specialist, commented:
"There has been a clear reduction in the incidence of insolvencies over the current recession compared to previous ones. Retail is the sector which keeps bucking this trend. In fact, quarter on quarter retail insolvencies have increased for every one of the last 4 quarters. Other sectors which were showing this trend, such as construction and hospitality and leisure, have had fewer insolvencies during the second quarter of 2012 than the same period last year.
“The high street environment continues to be challenging and quarter 2 has seen Clintons, Game and Julian Graves go into administration.”
Which sectors are struggling the most?
The worst affected sectors continue to include construction (644 companies), manufacturing (427), retail (426), hospitality & leisure (332) and real estate (169).
PwC's analysis shows that London continues to have the highest number of insolvencies with 887, but this represents a 9% fall compared to the same quarter in 2011 (980 companies).
The North East/Cumbria had the biggest increase in insolvencies compared to the same quarter in 2011, with 277 insolvencies compared with 163 in the same quarter of 2011, a 70% increase. Compared to the first quarter of 2012, the region has seen a 68% increase in insolvencies, and is in fact the only region which saw a rise in insolvencies over the previous quarter.
The biggest reduction in insolvencies year on year has been recorded in the West where the number of insolvencies dropped by 32% (from 173 companies to 117). The West is also the most improved region since the previous quarter, with a 29% decrease in insolvencies since the first quarter of 2012.