INSOLVENCY experts have predicted a spate of failures among retailers soon after Christmas. December 25 is “quarter day”, when rent is due, and struggling outlets could face collapse.

In the week before Christmas, Unwins, the off-licence chain, and MVC, a DVD and music retailer, called in administrators. Several businesses, including Forminster, the UK franchise-holder for the Kookai brand, are believed to be facing problems.

By the end of this year, more than 1,040 retailers will have gone out of business, up 9 per cent on 2004, according to insolvency experts at BDO Stoy Hayward. Allders, Courts, Furnitureland and Allsports succumbed during 2005, as rising costs and slower consumer spending squeezed profits.

However, Dermot Power, a partner at BDO, said that although quarter day falls on Christmas Day, most chains should have a period of grace. With landlords and bankers enjoying the Christmas holidays, he believes that most struggling retailers will attempt to keep trading for as long as possible: “The major imperative will be to take money between Christmas and new year,” he said. “The moment business springs back into action, buttons will be pressed and we will start to hear about the failure of businesses.”

He believes that owners of businesses in distress will attempt to get as good a price as possible for their merchandise, usually best achieved by continuing to trade.

Myles Halley, a partner at KPMG, the accountant, said: “Clearly, after the Christmas period, the finances of the business are at their optimum. If the business doesn’t make money in this quarter, all the stakeholders are likely to lose confidence.”

Jewellery, fashion and electrical retailers are most at risk this Christmas, according to insolvency practitioners. However, Mr Halley, who is handling the administration of Unwins, said that furniture stores would come under increasing pressure in January.

Furniture stores take a large proportion of their orders in January and have to be sure that they have sufficient funds to be able to deliver their goods. “It tends to be in January that things come to a head,” Mr Halley said.

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