Milan Pandya, a partner at the firm said, “it is vital that the Chancellor announces a clear and comprehensive plan to support non-essential retailers. The sector needs continued short-term support but also longer-term assistance whilst it transforms.”
He added: “ The announcement that Upper Crust are to cut up to 5,000 jobs and TM Lewin, a well-known brand with a history of over 100 years, is expected to close all of its UK shops with the result of 600 job losses is another huge blow and compounds announcements in recent weeks by other recognised retail brands such as Mullberry, Oasis, Warehouse and Clarks who have either announced redundancies or gone into administration.”
Milan said: “For many retailers a real cash flow crisis has arrived. With stores re-opening and Autumn/Winter season purchase orders having to be made, many retailers are having to commit to spending cash against a backdrop of real uncertainty – will customer demand bounce back or will there be further lockdowns such as in Leicester or country-wide.
“The pressure on working capital is immense and this is before many businesses consider the further cash needed to support investment to pivot the business to strengthen long term survival prospects, most commonly developing the right e-commerce platform.
“The fashion industry alone employs in excess of 900,000 people, many being in retail stores. If the recent spate of closures and redundancies continue the government has a real long-term problem of unemployment as many jobs will be relatively low-skilled.”
He added: “The government policy response was swift on lockdown with the announcement of a basket of measures to alleviate immediate pressure on cash flow including bank loan schemes, furlough support, VAT deferral and business rates holiday.
“It is also fair to say that such measures have provided a lifeline for retailers large and small over the past three months but no more. The Chancellor needs to consider extending the existing measures, possibly on a clear means-tested basis.
“It is vital that he announces a number of measures which hopefully he will do when he makes his budget statement next week including:
- Cut the rate of VAT
- Grants to support retraining of employees to support continued employment in their existing job
- Tax reliefs to support businesses which are investing in e-commerce or other long-term capital projects
- Credit insurance
- Measures to encourage employment – for example a temporary ‘holiday’ on employers’ National Insurance Contributions.
Milan concluded: “Measures along these lines will provide real targeted support to the retail sector and protect jobs but they have to be implemented now to save jobs and businesses.”
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