Yahoo Finance Staples sale takes jobs affected by retail failures in 2016 to 26,000
Sale of US stationery chain’s UK business brings jobs figure to 25,933 – highest since 2012 and four times last year’s number
The sale of Staples has taken the number of UK retail jobs affected by business failures this year to almost 26,000 – the highest figure since 2012 when the sector was still reeling from the recession.
With six weeks of 2016 remaining, 22 medium and large retailers employing 25,933 people have failed, according to the Centre for Retail Research (CRR). The number of jobs affected is almost four times the 6,845 for all of last year and exceeds the 25,140 total for 2013.
The CRR figures do not take into account businesses that fail but are then revived under new owners. The numbers also exclude job cuts by companies that are still trading, including Tesco and Marks & Spencer, which is cutting up to 500 head office jobs and closing stores.
Staples, the struggling US stationery chain, has sold its UK business to Hilco Capital for a nominal sum. Hilco, the retail restructuring firm which revived HMV, will take on Staples’s 106 stores, which employ more than 1,100 people.
The stores will remain open while Hilco decides what to do with the business, though the Staples brand will be phased out in the next six months.
Staples is the latest familiar retail name to face difficulties this year, after the collapse of BHS and Austin Reed, as well as the planned closure of US retailers American Apparel and Banana Republic’s UK stores. Exhibit, a fashion chain in Northern Ireland employing 100 staff, went into administration last month after 33 years.
Professor Joshua Bamfield, director of the CRR, said the rate of failure was alarming because the economy had been growing for the past few years and businesses shutting now had made it through the recession, which was meant to have cleared out redundant or inefficient operators.
He said CRR had added almost 1,500 jobs to the 2016 running total since the end of October and that this was worrying so close to Christmas, the peak trading period for most retailers.
“Though there are fewer companies failing than a few years ago the impact is a lot bigger because the chains that are going have managed to survive since the recession. Many of them are quite large or they are people who, after years of clinging on for dear life, are saying it’s not worth bothering any more.
“People closing before Christmas is also a really bad sign because Christmas is where you make your profits so if you’re saying it’s not worth carrying on for a couple of months that is a bad signal.”
High streets face multiple pressures as consumers buy more goods online and shift their often diminished spending power from physical goods to leisure activity such as eating out and holidays. High business rates and other costs, which have risen faster than spending, have made matters worse.
Bamfield said: “This is the biggest change we have seen in retail in such a short period of time.”
The worst year for retailers in the past decade was 2008, when 54 companies, including Woolworths, failed affecting almost 75,000 jobs. Retail jobs affected by business failures fell to fewer than 11,000 in 2010 but rose again to more than 48,000 in 2012 before easing as the economy picked up.
