The dangers of ‘window dressing’ for retailers

The dangers of ‘window dressing’ for retailers

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Under-pressure fashion stores may be tempted to “window dress” their figures, an expert has warned.

John Kelly, regional managing partner at the Birmingham office of corporate recovery specialists Begbies Traynor, said the sector was directly in the firing line of the economic downturn as consumers reined in their spending or shopped online.

He urged the fashion world to be realistic and face up to their problems.

“Buying market share and price cutting below cost price rarely work in the long run. As you may expect, it can often increase the risk of failure.

“That said, keeping and valuing obsolete fashion stock may support a balance sheet but will eventually be found out. Cash is still king and much better to ‘move on’ and realise the cash value.

“Fashions rarely return in the short term – as my wardrobe will confirm!” said Mr Kelly.

According to Begbies Traynor’s most recent Red Flag Alert benchmark, general retailing is facing a 26 per cent jump in critical financial distress annually.

Troubles on the High Street have in recent months claimed female fashion group Peacocks, affiliated company Bonmarché, lingerie chain La Senza, gifts retailer Past Times and outdoor supplier Blacks.

Mr Kelly said: “I very much doubt we have seen the last of the blood-letting. With the economy flirting with a double-dip recession trading won’t be getting any easier in a hurry.

“Trying to hide the pain will in the end only make the situation worse. My advice would be – seek help at the first sign of trouble.”