Insolvency risk hovers over high street as retailers suffer difficult run up to Christmas

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Oxford Street in busier times, the British high street is thought to be struggling in the run up to Christmas this year
Oxford Street in busier times, the British high street is thought to be struggling in the run up to Christmas this year

High street retailers could face insolvency in the new year as the run up to Christmas has not been as good as expected.

A discounting war and the much warmer than average temperatures, as well as the constant threat of internet shopping, has prompted panic on the high street, as sales appear to have been sluggish.

In the last few years Woolworths, HMV, Zavvi, and Jessops have all called in the administrators after a poor Christmas showing. Retailers gain nearly 40 percent of their annual profits between October and December.

Atradius, one of the world’s largest trade credit insurers, has warned that retailers face a ‘perfect storm’ that could lead to a bleak start to 2016 and a “fresh wave of insolvencies”.

The comments from Atradius are significant because if a credit insurer refuses to back a retailer then suppliers will be unable to insure their orders with the business and could decide not to provide it with products.

Many high street retailers will be hoping a strong post Christmas sales period will set them back on the right path.

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