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Financial Health Warning


Posted At: 30 January 2009 11:13 AM
Related Categories: Retailers, Town & Shopping Centre Management


The consultants at FSP have been looking at the financial health of retailers and I thought I'd share with you their view of retailing At Risk.

Analysis by retail business consultants FSP shows that the financial accounts of 40% of multiple retailers, with a combined total of almost 13,000 stores, are Very Worrying.  By linking these store locations, FSP has produced the first geographical assessment of the impact of At Risk retailers on towns and shopping centres.  While the analysis identifies some regional and size related drivers, locally more complex factors are at play. 

Companies have been identified as Very Worrying by applying the DIUS Wealth Creation Efficiency Ratio to the financial accounts of over 600 multiple retailers.  All the recent failures of multiple retailers, bar one, had previously been classified as Very Worrying.  The Very Worrying category includes all companies whose Value Added (sales less cost of bought-in goods and services) is less than the cost of staff and depreciation.  With basic operating costs not being covered, these retailers are At Risk without continuing investment.

See the full press release, including Town Centres most At Risk here.

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The opinions expressed herein are the personal opinion of the author and are not intended as statements of fact and do not represent the view of SnapShop or Pragma in any way.


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