A leading law firm is calling on the Chancellor to provide urgent help to the UK’s retailers in her forthcoming autumn statement in order to prevent “a continued surge in redundancies, contract breaches and tribunal claims.”
The warning from national law firm Clarke Willmott LLP comes amid a wave of distress in the retail sector and with inflation having risen to 3.8 per cent – the highest since January 2024.
The High Court has recently sanctioned River Island’s restructuring plan, which aims to preserve up to 4,000 jobs, but also means the closing of 33 of its stores across the UK, with a further 70 sites at risk. The plan was launched after its most recent accounts revealed a £33.2 million loss.
Fashion accessories retailer Claire’s is also on the brink, having collapsed into administration, with 2,150 jobs put at risk whilst the administrators look to find a buyer. Meanwhile, Poundland plans to close 68 stores as part of its own rescue strategy, with over 2,000 jobs at risk.
Sharon Latham, partner in the employment team at Clarke Willmott, says Rachel Reeves must urgently address the pressures facing independent and high street retailers in her autumn statement.
She warns that without meaningful intervention the sector could face further closures and escalating legal risks.
A recent survey by the British Independent Retailers Association found that 47 per cent of retailers identified business rates reform as the most critical issue requiring government attention.
“This reflects the urgent need to overhaul a system that disproportionately impacts small and high street businesses”, says Sharon Latham.
“Meanwhile recent changes to National Insurance thresholds have significantly increased employment costs for retailers, compounding financial pressures for businesses still suffering from the after-effects of the pandemic as well as supply chain instability and unpredictable energy costs.
“Retailers are under immense pressure and without transitional support, we risk seeing a continued surge in redundancies, contract breaches, and tribunal claims. Employment stability must be a central focus of the autumn statement – it must reflect the realities of operating in today’s retail environment and support the long-term sustainability of the sector.”
Ken MacLennan, partner in Clarke Willmott’s insolvency and restructuring team, says the retail sector is likely to remain under significant pressure this year.
“While interest rate and energy cost pressures have eased recently, consumers remain understandably cautious with their money in an unpredictable political and economic environment. There is no doubt there will be more pain to come on the high street and it will include more high-profile insolvencies” he says.
“Nonetheless early action, engagement with professionals and an open dialogue with creditors, as well as the availability of restructuring tools, can help retailers to survive, mitigate problems and recover from financial difficulties to profit.”
For more information, please visit Employment Law – Clarke Willmott Solicitors or Restructuring and Insolvency - Clarke Willmott Solicitors.
Clarke Willmott is a national law firm with offices in Birmingham, Bristol, Cardiff, London, Manchester, Southampton, and Taunton.
