Retail Crisis: Three Key Questions
Updated: 11:37am UK, Friday 18 January 2013
By Poppy Trowbridge, Business & Economics Correspondent
The joke in the office these days is: if you see Poppy coming, watch out – there's a company somewhere in sight that's about to call in the administrators.
Trouble is, since I joined Sky in late November – four major high street retailers have collapsed and subsequently had to call in the accountants.
In late December 2012, Comet, the consumer electricals chain, hit the wall, resulting in more than 6,000 job losses.
This year, Jessops, the camera retailer was the first major casualty. Pressure from online competition and a boom in camera phones in recent years has hurt demand for the more conventional cameras they sell.
Then, in mid-January, HMV, warned it was about to end nearly a century on the high street as it appointed Deloitte as administrators.
A day later, I was in Watford, standing outside an outlet of the DVD and film rental company Blockbuster. They too had just told staff they were handing the business over to the accountants.
You can see why catching sight of me, might send someone running. But those that don't make a dash for it, are asking me three crucial questions:
Why are so many high street retailers going bust right now?
Who's next?
What will be left of the high street in the future?
The first question is easy to answer. January is a time when retailers are low on stock just after the Christmas period, and a time when (in theory) they have the most cash in the till – again, coming off the back of holiday buying.
Also, with the busiest shopping period of the year just gone, they're in a position to judge how well they have, or haven't, performed and whether they'll make it through another year.
This is when owners, managers, bankers, creditors, and backers decide if they'll continue on, or call it quits. With the economy still struggling – the latter is becoming more of a necessity.
Who's next?! Who can say for sure? But the shops that have collapsed have some common features.
They are often specialist shops. Think of Jessops and its almost exclusive focus on camera equipment, or Clinton Cards which went into administration in May 2012.
Many pay high rents to have multiple spaces on the high street and sadly, many of the companies have been slow to adopt modernised methods of online selling.
Which brings us nicely to the final question: What will the high street of the future look like?
The reality is it's evolving right before our eyes.
Most of us carry a portal to every shop we could ever want in our pockets or handbags. Mobile and online retailing is a trend that's only likely to expand.
But take heart, that may simply mean that we won't have to carry as many bags home on the bus, as retailers ship our purchases directly to our homes.
With all this in mind, I'm convinced high streets are nowhere near disappearing. They may look a little different in five years time, but the high street will always be there for what I like best: window-shopping.
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