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Closures hit ‘record’ levels in the first half of 2019

The number of stores closing down in the first six months of the year has reached its highest levels, with 2868 closures recorded for the period.

An average of 16 stores a day shut their doors, according to research by the Local Data Company (LDC) and accounting firm PwC.

The biggest net declines were seen amongst fashion retailers (-118), restaurants (-103), estate agents (-100) and pubs (-96). However, seven of the top 10 sectors for store openings also featured amongst the top ten sectors for closures, such as fashion.

Greater London saw the largest number of net closures across all the regions, although it was right at the national average (-1.8%) when taking into account its overall larger number of units.

Zelf Hussain, retail restructuring partner at PwC, said: “A number of high profile business administrations have contributed to the record net decline in high street store numbers, for example in fashion retail and casual dining.

“Several of these were in turn caused by a culmination of CVAs that reduced rents and store numbers, but did not sufficiently improve the consumer proposition or cost structure of those brands.”

He added: “This reinforces our view that any business restructuring needs to happen alongside a wider programme of change. As we approach the key revenue period in the run up to the festive season- often make or break for many retailers- right-sizing store portfolios and wider cost bases will be crucial.”

Lucy Stainton, head of retail and strategic partnerships at LDC, said: “One of the most striking things about this latest Local Data Company and PWC analysis is the level of market churn identified in such a short space of time.

“Whilst the overall net change number, a loss of 1,234 occupied units in only six months, is certainly significant, the level of openings and closures activity beneath this is hugely notable as the industry continues to re-set.”

She added: “In our experience, retailers are being much more cautious and risk averse as far as both planning for new store openings and in making decisions across their existing property portfolios.”

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