BusinessBusiness RecoveryWoolies demise not the end of high street collapse misery

Woolies demise not the end of high street collapse misery

More retailers set to be crippled by quarterly rents which falls due soon, while fraudsters look to cash in

The demise of Woolworths is likely to be followed by more misery for
retailers.

Quarterly rent is the next major stumbling block for embattled retailers and
the threat of fraud is set to rocket, according to experts.

Andrew Durant, managing director of the Disputes & Investigations team at
Navigant Consulting, said: ‘A number of other retailers are likely to go to the
wall before the New Year or may close shops to save costs.The quarterly rent is
due after Christmas and many retailers will literally shut up shop rather than
pay.’

Retailers will continue through Christmas hoping that they can shift stock
from the shelves and generate well-needed cash, but they have been forced to
slash their prices, severely reducing their gross profit margins.

Durant said that the threat of fraudsters looking to take advantage of the
tough economic conditions would rocket.

‘Based on my experience from 2000/01, fraudsters will plan ahead,’ said
Durant. ‘They will spot an opportunity and take it, knowing that with outlets
and businesses likely to shut after Christmas the mayhem will help to cover
their tracks.

‘I saw large orders of stock from suppliers being diverted to premises
controlled by the fraudsters and their accomplices. There were also inter-store
transfers that were never received. Fictitious payments were also made.

‘If retailers do fail or shops are shut over the Christmas period, anyone
involved, administrators or new owners, should ensure that they consider that
fraud may have occurred as the motives and opportunities were present.

‘They will need to ensure that the paper and electronic trail is maintained
and should look in the obvious places – check the bank statements for any large
or unusual payments, ensure that all recent purchases can be accounted for and
that stock transfers were real.’

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