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Retailers face the Boxing Day blues

Published:  22 December, 2011

Grinch landlords could give troubled retailers the Boxing Day blues

According to Simon Porter, assistant in the real estate team at law firm Dundas & Wilson, the December quarter day could see a new surge in retailer failures.

“When retail boomed, retailers could rely on confident consumers with a desire to spend filling their stores and festive tills,” said Porter. “Summer lulls and autumn dips could be smoothed over by Christmas profits.

But this Christmas, after a tough trading year, many retailers find their cash reserves severely depleted after stocking up for Christmas and by rent payments made on the September quarter day.

Porter warned that n this challenging environment there is a real danger of some retailers running out of cash and not even making it through the festive trading period on which many are relying to survive.

“Even if struggling retailers do make it to Christmas Day, the spectre of the December quarter day on 25 December is looming like the Ghost of Christmas Yet to Come,” he said. “Freshly filled coffers will immediately be raided to meet landlords' rent demands and there may then be insufficient cash flow to pay the bills in the New Year.

“Unless the retail economy shows a significant upturn over the festive season, the harsh reality is that many retailers could find themselves facing the New Year insolvent as well as hung-over.”