A Snapshot of Administration Britain

Business administration leads to redundancies and is a common reason that our homeowner loans team hear for how consumers to ended up in debt. So we decided to give them a break from explaining to people how to get a homeowner loan and tasked them with taking a deep dive into how business administrations impact the UK.

Administration affects businesses across the UK in an almost relentless fashion. 2022 saw 22,109 business go bust, which costs the economy and worst of all, results in mass redundancies for those who worked for the company.

While running a business can seem simple when watching shows such as Alan Sugar‘s The Apprentice, the rates of business failure show that it isn’t the case.


With business closures in the UK never far from the front pages, we’ve taken a look back at the past decade to create a snapshot of how high street stores entering administration and filing for CVAs (Company Voluntary Arrangements) is affecting Britain’s retail landscape.

Combining the most widely publicised instances of businesses entering into administration from SMEs right up to iconic UK retail institutions, our visualisation highlights the closure of almost 9,000 physical locations and more than 125,000 redundancies from 2010-2019.

As you can see, we’re certainly not out of the woods when it comes to the financial problems plaguing UK companies. Especially in light of recent high-profile cases of administration leading to large-scale closures like Mothercare and Thomas Cook. The most common causes for these closures are:

  • Rising overheads like rent on retail units
  • Overexpansion and the associated debts
  • Changing customer behaviours and expectations
  • Lower expendable income for shoppers

ABC Finance reached out to Martin Newman – a former multichannel operator for Ted Baker, Harrods and Burberry who shared his thoughts on the subject:

“We’ve had the perfect storm in recent years. The political uncertainty has fuelled a fall in consumer confidence and a subsequent tightening of belts. This has led to various brands losing sales on a like for like basis.”

“Also, companies opening too many stores. As maybe 25% to 35% of customers have migrated online, most of these sales are channel shift rather than being incremental.”

On one of the larger examples of administrative proceedings in recent years, travel agent Thomas Cook, Newman offered his insights into what went wrong:

“Thomas Cook was too slow to recognise the impact of consumers booking their own flights and hotels as opposed to packages. They also had the issue of not trying to sell their flights as low-cost flight-only options the way TUI has.”


Splitting up our snapshot into wider sectors, here are the areas that are shuttering the most locations across the UK via either administration or the CVA process.

Sectors hit by administration

To get more granular with which specific businesses are having the most trouble, our research has found that the following types of retail outlets have proved most likely to call in the administrators across the past decade leading to locations closing and redundancies:

  1. Fashion Retailers
  2. Homeware & Furniture
  3. Electronics Stores
  4. Department Stores
  5. Jewellers

The issues faced by the majority of the top five can be directly tied back to the continued move of consumers away from brick and mortar shopping towards online alternatives. There have been steps taken by some to combat this with ‘experience focused’ sales units that offer more than the traditional retail interaction, however, as is made evident by continued closures, there’s still some way to go.

We spoke to Mark Pacitti, CFA, Founder and Managing Director of Woozle Research to get his insight into the problems plaguing retail:

“The main issues here are that the problems retailers are facing is one of high rents, rising business rates, low margins, weaker foot traffic, economic headwinds, and shifts towards online. These factors are lowering revenues and profits at most high street retailers and their ability to pay back debt is hugely questionable. They are in a structural decline and one which requires radical rethinks of their business models which few retailers, management teams, or creditors can really stomach.”


An alternative to administration that is becoming increasingly popular with businesses in financial difficulty is a Company Voluntary Arrangement. According to PwC, from 2016 to 2019 the number of retailers choosing the CVA route has doubled.

This process costs less than calling in an administrator and allows a company to agree with its creditors (i.e. landlords, HMRC, trade or employees) to pay its debts off across a set period.

For this to proceed, the proposal must be approved by creditors who represent 75% of the debt and, once agreed, all parties are bound to it. If the company fails to meet the terms, there’s a risk that they’ll be forced into liquidation.

Here Martin Newman lays out the reality of the CVA process and how it compares to administration:

“A CVA can give the business a chance of survival by helping it get out of expensive, long-term leases for often unprofitable stores. Administration can help the business to be sold but can also often then lead to the death of the business but a CVA is no guarantee of success it may only delay the inevitable. The core business model still has to work. You need to have products customers want to buy and you need to be able to sell and deliver through the appropriate channels in order to provide the convenience consumers seek.”

Mark Pacitti also offered this commentary on the changing face of CVAs:

“CVAs mainly buy a retailer time rather than solve underlying fundamental. A recent research report by the ICAEW shows that of the 552 companies that entered into CVA’s since 2013, less than 15% survived. They aren’t a cure for struggling retailers. Instead, they need to adapt to a modern market & refocus their offering. Bricks and mortar retailers are losing out on price, convenience, and service and failure to adapt and invest is causing businesses to go under.”

On why this process often doesn’t end well for companies, Pacitti added:

“In many instances, CVAs are poorly conceived with little due diligence or care taken to ensure the retailer is doing something different to ensure its survival. The process keeps companies and its staff in business but puts pressure on rents and kicks the can down the road.”

To get help give you the full picture, we asked Charles Brook, Partner at Poppleton & Appleby Licensed Insolvency Practitioners to share his expertise with us:

“Shortly after the financial crash of 2008 the existing insolvency tool of a CVA became very popular amongst larger firms of Insolvency Practitioners looking for a cost-effective and tax-efficient process for restructuring large retail corporates that would otherwise slide into administration.”

On how CVAs are currently being applied to businesses, Brook elaborates:

“It is probably fair to say that the legislators never contemplated that a CVA would be used in this manner but, some clever lawyers recognised that the ability to use a CVA to cram-down particular groups of creditors, made it particularly effective as a means of shedding the burden of long-term retail leases. Landlord representatives and property-backed pension fund operators rebelled by challenging the use of the process, but the courts supported the IPs.”

“Since then the process has become the weapon of choice for retail turnaround specialists. There is a mood for a change in the law which is being driven by the pension fund operators and by the syndicates backing the larger retail park operators. The landlords and their financiers appear to have had enough and it is likely only to be a short time before a future government may be forced to recognise that the balance of power from retail landlords to tenants has shifted too far.”


It’s easy to view the UK’s issues on the high street as isolated but it has a knock-on effect across the entire economy, costing throughout 2018 and 2019 doesn’t look like it’ll fare much better. This is concerning due to the fact that retail is thought to generate 5% of our total GDP (Gross Value Added).

To offer a better understanding of the importance of retail to the UK economy, here is how the sector looked at year-end 2018, which looks likely to be closely matched by those at year-end 2019 – due to forecasts of the.

  • Total value of UK retail sales (2018) – £381bn
  • Proportion of consumer spending in the UK retail sector (2018) – 1/3
  • Total number of retail outlets in the UK (2018) – 299,415
  • People employed in UK retail (2018) – 2.9m

Our research into 186 individual cases of business administration proceedings over the past decade showed that almost 9,000 physical locations and over 125,000 jobs have been affected. 22,000 of the redundancies covered in our research occurred in 2019 alone.

This puts pressure onto the government and wider economy as people are left without a source of income and forced to rely on financial assistance until they get back into employment.

On the subject of job losses and uncertainty due to administration and CVAs Martin Newman offered this advice:

“If you are still employed: the administrator may take on your employment rights for a period and then choose to sell the business or close the business. In general terms, if the administrator employs you for more than two weeks, they automatically adopt your employment rights. These can then be transferred when the business is hopefully sold on as a going concern – this is known as TUPE or transfer of an undertaking.”

“If the company goes into a CVA you may or may not retain your job. Your rights can be affected by a CVA. Subcontractors need to ensure that they contract with the company in administration. Generally speaking, as an administrator, he or she will have to pay this but won’t pay the arrears of payments you are owed.”

In terms of the closed locations, while some are snapped up by competitors or the rising number of better-performing independent retailers, many are left vacant for extended periods. This can have dire consequences for local economies as high streets have begun to resemble ghost towns in some areas of the UK.


While there are plenty of thoughts on how best to improve the state of the UK’s high streets and retail market as a whole, nothing has yet been put in place to make a dramatic difference.


The best options for businesses facing financial distress are secured products. These products are more likely to be approved for businesses in financial difficulty, with the best options usually being a commercial mortgage, secured business loan or bridging loan.

Equally invoice finance is popular with borrowers who receive payments on delayed terms and have strong debtor books.

If you want to keep reading, why not check out The Royal Economy – a dive into the financial impact of The Royal Family on the UK economy.

Invoice Finance – We provide Invoice Finance, allowing your business to sell its invoices to us at a discount, improving your cash flow and reducing receivables.
Invoice Discounting – With our Invoice Discounting option, you can maintain control over your sales ledger while we give you an advance on a percentage of your invoice values
Homeowner Loans – We offer Homeowner Loans, where you can use the equity in your home as collateral to secure a loan, providing you with the funds you need
Secured Loans – Our Secured Loans are backed by your assets, such as property or a vehicle, ensuring lower interest rates and better loan terms
Second Charge Mortgage – We provide Second Charge Mortgages, allowing you to use the equity in your home as collateral for a loan, which sits behind your primary mortgage.
Bridging Loans – Our Bridging Loans are designed to help you manage the financial gap in property transactions, offering short-term funding until you sell your existing property.”

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