Insolvency Insights - Analysis of ASIC's Latest External Administration Appointments Statistics from September 2014
The latest ASIC figures show that the number of companies that entered external administration in Australia during September fell to 797, compared to the 831 companies recorded in the previous month, and making it the lowest level recorded since April 2014. In total, 6,791 companies have entered external administration in 2014, down 17.9% on the corresponding period of 2013.
In this edition of Insolvency Insights, we focus on the retail sector which is showing steady signs of growth. The Australian Bureau of Statistics (ABS) figures for retail turnover in October showed the seasonally adjusted estimate rose 0.4% month-on-month. This follows a rise of 1.3% in September and a rise of 0.1% in August 2014.
ABS statistics for year-on-year growth to October show that household goods (11.5%), cafes, restaurants and takeaway services (7.1%), food retailing (5.7%), other retailing (2.8%) and clothing, footwear and personal accessories (0.2%) all showed positive albeit modest growth, with department stores the only category to report a decline (-0.2%).
As the Australian dollar has depreciated since December 2013, domestic online retailers have grown their share and now command 75.2% of total online sales. However, we continue to see examples of traditional retailers with fixed cost bases unable to respond in a meaningful way to the buying power of larger, international players or the onslaught from online competitors. We showcase a recent matter, involving kitchenware retailer Robins Kitchen, which illustrates this trend.