Redefining Retail – Over 150 Retail Store Closures Announced

The first quarter of a new calendar year often sees a spike in insolvency, but if what has been announced already in the first weeks of 2020 is anything to go by, credit providers will be keeping a very close eye on the retail sector this year. Retail has always been a tough business and relies heavily on strong trading conditions over Christmas to build cash reserves for the rest of the year. Whilst retail trading figures for this period are not yet available, anecdotal evidence points to a disappointing result. In December 2019, Harris Scarfe was placed in receivership and has subsequently announced the closure of 21 stores, with NSW and QLD hardest hit. More recently, EB Games announced the closure of 19 stores and Curious Planet, previously known as Australian Geographic announced the closure of 63 stores.
Retail Store Closures Announced

This week, Jeanswest went into administration, blaming “tough market conditions”, and earlier in January McWilliams Wines, the 140 year old family run wine company appointed administrators.  

Retail sales performance is impacted by consumer confidence, and according to the Melbourne Institute and Westpac Bank Consumer Sentiment Index for Australia, consumer confidence declined 1.9 percent month-over-month to 95.1 in December 2019. When combined with the significant growth in online shopping, this is a worrying trend for both retailers and those businesses that supply goods and services to the ‘bricks and mortar’ retail sector on credit terms.

Supplies to the retail sector need to ensure their internal credit management procedures are robust, and that they have a reliable partner to assist them through the debt recovery process when needed.

A combination of well-defined internal processes, timely follow-up, quality credit documentation and a trusted debt recovery partner, all come together to support cash flow and put the odds in your favour of reducing the risk of a bad debt.

If you need help to recover your overdue business debts, call AMPAC on 1300 426 722 or email us at sales@4ampac.com.au

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