Friday 18th January, 2012

January is traditionally a dangerous time to be a retailer. With tills still ringing from the glut of Christmas sales, struggling retailers start to look vulnerable to creditors anxious to minimise their losses. With the demise this week of both HMV and Blockbuster - falling hot on the heels of Jessops, thousands of jobs are hanging in the balance, and hundreds of suppliers are in urgent talks with administrators to find solutions to shore up their own businesses.

The finger of blame seems to point mostly to online shopping, but high rents, low incomes and a retail sector slow to predict a change in consumer behaviour are also, if not equally to blame. Some retailers which five or six years ago were starting to look as out of date as Woolworths have been able to reinvent themselves. Old workhorse, and consumer favourite WH Smith's took the wise decision to bow out of the music and DVD business and moved back into its core business, while also stepping into "rent by turnover" deals with airports and train stations.

Our high streets are in crisis, but people will always need somewhere to actually go to have their hair cut, have coffee and meet friends - the business challenge will be to try to predict patterns of behaviour and take a realistic view on high street rental arrangements and credit and loan terms to retail and small businesses.