Thankfully, we aren't seeing the high level of retailer administrations that occurred during the depths of the financial crisis. But a look down the list of failed retailers over the last couple of years is still quite concerning, particularly for their retail landlords.
To name a few headline-makers, we've seen Barratts, Blockbuster, Comet, Jessops, La Senza and Phones4U go into administration. The most recent casualty is fashion retailer Bank with its 84 stories. Unfortunately, retailers still face a hefty weight of problems. Most notably, the ongoing profits squeeze between rising raw material costs and the falling price of goods driven by online retailers, supermarkets and discount stores.
When a company goes into administration, it falls to administrators to take over its management. Their objective is to find ways for the business to continue trading, but in many cases this means closing the business and selling its assets. Faced with this, landlords could do little to recover lost rent.