High Street is Hurting

Thursday 09th of June 2011 05:57:57 AM

High Street is Hurting

High street has suffered as a result of the recession, and the pain continues. Whereas the online retailers have proven to be more flexible and able to withstand the economic onslaught, the brick and mortar stores are disappearing one by one. Yes, many of them will survive but many are going into administration. In the UK, one of the most recent failures is the fashion chain Jane Norman. A US insolvency specialist, Zolfo Cooper, will handle the pre-pack administration of the fashion retailer.

Fortunately you can shop online for just about anything from housewares to sweatshirts so the closure of some chains only benefits the online retailers. However, when brick and mortar stores close it usually means people will lose their jobs. Jane Norman operated 90 shops plus had a concessions business run by Debenhams. If Jane Norman closes, there are as many as 1,600 jobs that could be lost. Jane Norman is in good company because other large chains have preceded the fashion retailer and include Habitat and HMV.

It’s possible that Debenhams will buy the Jane Norman brand or at least the stock but nothing is certain at this point. If you are not familiar with pre-pack administration then you’re not alone. Pre-pack refers to the sale of assets as soon as the company goes into administration.

There are more High Street retailers expected to go into administration before the economy gains steam. With the quarterly rents coming due, it is expected some clothes retailers will announce they can’t pay the rent and will be forced into administration. Jane Norman is one of the retailers who have already asked for a rent delay. High Street companies like Home Retail Group and Tesco will be announcing financial results soon. That will give a much better idea of which stores will still be here by the end of the year. In the meantime, keep shopping for your cheap t-shirts online. There’s an excellent chance your favorite online clothes retailer will be going strong.