Insolvency practitioners are finding increasing work in the retail manufacturingsector as companies that supply high-street retailers are put into liquidation following a switch by clients to sourcing stock abroad.
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Practitioners across the country have found that the recent downturn affecting high-street retailers is having a lethal knock-on effect on the UK manufacturers making the goods they sell. Faced with cheaper, but equivalent quality, products, the high-street sellers are buying goods from Asia and eastern Europe. UK manufacturers are finding it almost impossible to compete.
Earlier this month, a team from PKF’s Stoke practice liquidated Biltmore,a manufacturer that for the past 20 years had made clothing for Next.
Although the high street retailer continued to buy from Biltmore, it was no longer providing them with enough business to keep the factory going, according to liquidators.
‘Next could source the same product abroad. Because of the cost implicationsthey were pushed out of the market,’ said PKF partner Mustafa Abdulali. ?Old-style manufacturing, it’s on its way out.’
Other insolvency practitioners, such as John Alexander from Cater Backer Winter in London and KPMG’s Blair Nimmo in Scotland, have found the same trend.
Nimmo said: ‘The globalisation of clothing exports has had an impact upon business. Scotland used to have a strong textile manufacturing trade, but it has been consistently moving overseas. This is purely because they can get quality garments at low labour costs.’