These 12 high street heroes have faced the WORST trading years in their long-standing history. Here we review the biggest business lessons from the retailers who’ve gone bust.
From Toys R Us to Maplin, some of the most well known retailers that a whole generation of Brits have grown up with have shut their doors for the last time in recent years. What went wrong? Where did all that money go? And more importantly, who’s next?
VAT’s the problem?
Retailer: Toys R Us
Date of closure: February 2018
Number of UK stores: 105
Jobs affected: 3,000
Toys R Us hit a few speed bumps along its 61-year history, but the most significant sucker-punch for the toy retailer was its sky-high VAT bill totalling over £15 million. Even a £9.8 million pension scheme cash injection couldn’t save this childhood favourite. Now, administrators have been called in to tie up loose ends as Toys R Us slowly disappears from our high streets.
Brexit and other uncertainties
Retailer: Maplin
Date of closure: February 2018
Number of UK stores: 217
Jobs affected: 2,300
Maplin’s siren song came when the pound weakened after the Brexit vote, when consumer confidence nosedived and online retailers began to get aggressive in their marketing tactics.
Retailer: Brantano
Date of closure: March 2017
Number of UK stores: 137
Jobs affected: 1,000
Budget shoe retailer Brantano stumbled post-Brexit, once the sterling took a hit and consumer shopping habits began to change. As of last March, Brantano has bid the high street adieu, while 72 stores of its sister company, Jones the Bootmaker, was salvaged through investment from a private equity firm.
A business slump
Retailer: Prezzo
Date of closure: February 2018
Number of UK stores: 300
Jobs affected: 4,500
Prezzo may be down but it’s not out. The Italian restaurant chain entered a Company Voluntary Arrangement in February as a way to work around its liabilities and find a way to get back in the black. In the first phase of its restructure, this high street favourite will be shutting down at least 100 branches.
Retailer: La Senza
Date of closure: July 2014
Number of UK stores: 55
Jobs affected: 750
La Senza was a lingerie heavyweight at one time, but the firm failed to retain a steady stream of customers, and quickly fell into administration after it was sold in 2006.
Failure to merge
Retailer: Jaeger
Date of closure: April 2017
Number of UK stores: 109
Jobs affected: 700
Jaeger is as British as J Crew is American. The 133-year-old fashion brand struggled to find a buyer to match its ambitions, and closed its doors last April.
Retailer: Staples
Date of closure: November 2016
Number of UK stores: 106
Jobs affected: 1,100
Staples was on the growth warpath throughout the noughties, but an unfortunate failed merger derailed this office supplies store and sent it on a tailspin. US giant Office Depot was eyeing to acquire Staples, but the deal was blocked by regulators. This, coupled with declining interest in wholesale office supplies, catalysed the demise of this high street staple.
Failure to adapt
Retailer: BHS
Date of closure: April 2016
Number of UK stores: 164
Jobs affected: 11,000
BHS had a highly public downward spiral in 2016, falling from grace due to poor financial management and a £571 million deficit in the pension fund. The final nail in its coffin was its outdated brand identity and clothes and a failure to adapt to meet customer demand.
Retailer: Blockbuster
Date of closure: December 2013
Number of UK stores: 528
Jobs affected: 2,300
Blockbuster is a classic example of how entrepreneurial myopia can kill a business. The video lending firm had the opportunity to buy fledgling Netflix in 2000, long before video streaming went mainstream. The company dismissed it as a fad, and went out of business just as DVDs became obsolete.
Retailer: Phones 4U
Date of closure: September 2014
Number of UK stores: 550
Jobs affected: 5,500
Phones 4U was one in many electronics high street firms that failed to square off against online competition. The mobile phone retailer lost all of its contracts to supply phones from all of the big networks, failing to realise the market’s changing winds. More of these big phone companies were building their own footholds on the high street through physical stores, nudging Phones 4U out in the process.
Retailer: Tie Rack
Date of closure: November 2013
Number of UK stores: 44
Jobs affected: 200
At one time, every major British railway station and airport had a Tie Rack, providing ties on the go for busy businessmen. As office dress codes began to relax, so did customer demand. Tie Rack stayed true to its branding, and that spelled it doom in business.
Redemption and reinvention
Retailer: Jessops
Date of closure: January 2013
Number of UK stores: 192
Jobs affected: 2,000
Jessops is a unique tale of redemption and revival. In January 2013, this high street darling collapsed on a huge scale, shutting down 192 stores and sacking over 2,000 employees. Despite being £81.4 million in debt, the brand was rescued by Dragons’ Den investor Peter Jones, who turned it into an online-only business while it got back on its feet to relaunch 40 stores.
Research from insolvency practitioners at Real Business Rescue reveals more whys and wherefores behind the biggest brand shut-downs over the past five years in a handy infographic below.
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