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More than 75 percent of companies that entered insolvency during the second quarter of 2017 were creditor voluntary liquidations (CVLs).
Group Editor
An estimated 4,500 companies entered insolvency in England and Wales during this period and of these, 76 percent were CVLs.
Total company insolvencies increased by nearly 13 percent for the second quarter compared to the same period last year due to “a one-off event”. The Insolvency Service said this event was the fact 1,131 connected personal service companies (PSCs) entered CVLs, following changes to claimable expense rules.
However, the underlying number of business failures fell to a 17-year low. Excluding PSCs, corporate insolvencies dropped 15 percent for the second quarter, compared to the same period last year.
Commenting on the latest insolvency statistics, KPMG said the business environment remains tough for retailers and companies across the wider consumer and leisure industries with retailers such as Jaeger, Joy and Jacques Vert entering insolvency over the second quarter.
Blair Nimmo, head of restructuring at KPMG, said: “Retailers, particularly those mid-range high street fashion brands, continue to battle in the face of increased competition, mounting cost pressures and a squeeze on household expenditure.”
He added: “The impact of Brexit remains to be seen and the recent election has undoubtedly introduced greater uncertainty resulting in a negative effect on consumer and corporate confidence.”
The number of administrations for the second quarter fell nearly two percent compared to the same period last year – from 343 to 337.
Of the companies that entered CVLs during the second quarter, the Insolvency Service said around 88 of these companies followed administration – this was a decrease of 29 percent compared to the same period last year.
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