Number of retailers going insolvent jumps to 2,195 in the last year

High profile retail insolvencies in 2024 alone include The Body Shop, Ted Baker and online luxury fashion retailers MatchesFashion and Farfetch. 

Retailers have been hit by a combination of increased costs and cautious household spending. Higher interest rates are also causing significant problems for any retailer that has a significant level of debt that is either on a floating rate or is coming up for refinancing.

Rebecca Dacre, Partner at Mazars explains that although inflation is moderating, retailers are still not out of the woods as many are continuing to face rising staff costs. The national living wage for over 23-year-olds rose to £11.42 per hour last week – an increase of 9.6% on the £10.42 per hour in 2023.

Whilst in recent years, brick and mortar retailers have been more heavily affected by insolvencies, e-commerce retailers have also come under severe strain from rising costs and an unwillingness by investors to keep funding businesses where the route to profitability remains very uncertain.

The number of e-commerce insolvencies reached its highest level in five years, reaching 615 in 2023/24, an increase on the 521 insolvencies reported in the previous year. As well as MatchesFashion and Farfetch, Wiggle, the online bike retailer, went into administration in October of last year. 

*Source: Insolvency Service

**Source: Office for National Statistics