The latest figures released by lobby group Retail Excellence Ireland (REI) show a most welcome increase in retail sales with furniture and flooring sales up by 12% and garden centres up close to 9%. General grocery sales remain flat and that is attributed to competition amongst the multiples however the morning coffee take out is up by 7%, always a sign of a positive work force.
In general average sales in the industry rose an average of 5% which is a welcome sign that the general public appear a little more willing to part with disposable income.
These increases in sales will be welcomed by a retail sector, many of whom have been struggling with significant rental costs over the past number of years and a number of these firms are possibly now looking at the prospect of needing to raise working capital to allow them to grow as the market grows. In many cases, these firms may still be struggling with significant historical debt issues which makes the prospect of raising this working capital all the more difficult.
Whilst there are many sources of finance available at present and with negotiation it’s even possible to secure new finance at a decent interest rate from both the Pillar Banks and the Strategic Bank Corporation of Ireland (which has indicated recently it is now actually lending money), unfortunately for some firms, the prospect of raising working capital finance is currently not an option.
With two High profile examples of Examinership being utilised at present in Best Menswear and Mothercare , evidence shows that Examinership is the preferred choice for companies seeking to Restructure their debts but continue to trade and grow into the future.
David Van Dessel, Partner in Deloitte, believes that perhaps the recent developments in the New Companies Act 2014 might offer some hope for those firms who may not be a household name but can survive if they seek the correct advice at an early stage. He has stated that “With the eventual confirmation of “Examinership Lite” being available through the Circuit Court, coupled with the availability of the New Scheme of Arrangement, there are now realistic options available to these retail outlets who may be struggling under historical debt burdens to consider how they may be in a position to restructure their finances going forward and allow them to grow and flourish as the markets increase."
Article by InsolvencyJournal.ie