Retail failures soared 30pc on lower spend
BUSINESS failures in the retail sector soared nearly 30pc this year as consumers continued to rein in spending amid high unemployment and severe austerity measures.
New figures show there were 228 insolvencies recorded in the trade during 2011, up 29pc on the 2010 number. Data from insolvencyjournal.ie shows that retail insolvencies accounted for 14pc of the 1,638 insolvencies recorded this year. The total number was up from 1,525 in 2010.
Ken Fennell, a partner with Kavanagh Fennell, the firm that compiled the data, said the true failure rate in the retail sector was probably higher.
He added that the figure didn't take into account the collapse of sole traders or partnerships because there were no official statistics available for those failures.
Retailers have been offering big discounts in this year's post-Christmas sales in an effort to lure consumers. But trade representative group Retail Excellence Ireland expects that there will be a large number of business failures in the sector in 2012 as hard-pressed shoppers save rather than spend.
The construction sector still accounted for the bulk of this year's insolvencies, with 421 companies failing.
There were 284 corporate receiverships in 2011, up 26pc on the number recorded in 2010. Statutory receivers appointed by Nama accounted for 37 of the total figure.
Receivers were appointed during the year to companies including Whelan's Quarries and Bowen Construction. The agency also moved on entities controlled by developers, such as Sean Dunne, the Grehan brothers and Derek Quinlan.
"During 2011, Nama showed it was prepared to move against borrowers when it believes that it will result in more beneficial recoveries for the taxpayer," said Mr Fennell.
High-profile casualties in the hotel sector this year included Ashford Castle in Co Mayo as well as the Shannon Oaks Hotel. The total number of insolvencies in the hospitality sector reached 204, up 5pc on the 194 recorded in 2010.
Mr Fennell said he believed that the retail and hospitality sectors would be hit particularly hard in 2012.