Winter weather could tip businesses into insolvency

19 Dec 11

A return of the severe winter weather seen last year could tip some businesses into insolvency, research from R3: The voice of business recovery, has found.

Severe winter weather caught many businesses off guard last year, and a detrimental economic impact was widely reported. And research shows that a return of the ice and snow this year would reduce profits for almost half the businesses surveyed by R3.

Worryingly, the survey also found that on average, six per cent of businesses thought that adverse weather could tip them into insolvency. This increased to 11 per cent for the retail and distribution sector.

Commenting, Frances Coulson, R3 President said: "It comes as no surprise that the retail sector is most concerned. Earlier in the year, R3's Business Distress Index showed that retail businesses are more likely than any other to be concerned about their debt levels (41%). The research also found that 58% of retailers were experiencing a decrease in profit which was 24% higher than the cross sector average.

"Although the last retail figures showed sales were up, people are likely to curb their spending again after Christmas. Retailers also have quarter day to contend with at the end of December, which will mean many will be paying landlords a hefty lump sum. If a business is already struggling and does not think it will withstand the pressures of severe winter weather, it should seek the advice of a professional to ensure it has the best chance of survival."

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