fashion

Over 175,000 UK retail jobs lost in 2020


Over 175,000 UK retail jobs were lost in 2020 in what was a year of
unprecedented difficulty for the sector, as the strain of extended store
closures pushed many to the point of collapse.

According to figures from the Centre for Retail Research (CRR), a total
of 176,718 jobs were lost last year from high streets, main shopping
destinations, towns and villages, as well as small shopping parades and
isolated stores across the UK.

That’s up by almost a quarter on the 143,128 overall jobs lost during
2019, and equates to about 3,400 jobs lost in the sector each week.

Business falling into administration resulted in 71,811 job losses.
Topshop-owner Arcadia alone put around 13,000 jobs at risk when it fell
into administration last month.

The CRR said 47 percent of employees in companies that fell into
administration lost their jobs. In comparison, during the 2008 recession
only a third of employees of insolvent retail companies lost their jobs
“demonstrating that companies which went bust during 2020 were much larger
with the effects on staff numbers more pronounced”.

Unprecedented year of difficulty for retail

A further 11,986 jobs were lost through company voluntary arrangements,
a contentious insolvency procedure used to close loss-making stores.

A long list of fashion retailers launched CVAs last year, including LK
Bennett, Ann Summers, Moss Bros, Clarks, New Look, AllSaints, Bair Group
and Monsoon Accessorize.

An additional 92,921 jobs were lost through “rationalisation” as part of
cost-cutting programmes by large retailers or small shops simply shutting
for good – up 18.3 percent on 2019.

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Professor Joshua Bamfield, a director at the CRR, warned of more pain to
come for the sector in 2021 and said up to 200,000 more jobs could be
lost.

“Our forecast is based upon a number of factors such as the cumulative
effects of months of closure and its impact upon cash flow and rent arrears
that will be payable when the moratorium ends,” Bamfield said.

“Whilst the longer-term effects of the greater use by shoppers of all
kinds of online retailing is likely to be hugely damaging for physical
stores.”

Photo credit: Unsplash



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