Retail: UK retail failures show falacy of "recovery."

Walk down any UK highstreet or "mall" and you are likely to see Blacks Leisure, Milletts or one of Blacks other brands. But Blacks has been on life support for more than a year - many of its landlords offered it preferential terms just to keep shops open as more and more were boarded up.

But it's going to give up the unequal fight and it will enter administration. That will almost certainly result in closures of shops, reduction in warehousing and those empty retail premises as consolidation is the most likely result of any purchase.

It was inevitable: The Blacks branded shops were a tier higher than Milletts which sells low price, high quality outerwear and camping gear. Blacks aimed for managers and professionals and their more expensive sports. It was supposed to be a growing market but as the economy tightened, it became a niche and you can't service niche markets from high-cost shops in high traffic areas. Footfall doesn't translate into carrier bags when the majority of passers by wouldn't know one end of a ski pole from the other.

And if Blacks was busy stabbing itself in the eye with a pointed stick, La Senza was doing the same but for different reasons. Aiming to bring good quality, seductive (and in some cases downright sexual) underwear to the masses at prices that would guarantee a mass market aimed margins too low - and appears to have failed to account for the fact that men won't generally go into an lingerie-only store, brightly lit with big windows. In a La Senza shop, there is nowhere to hide, nowhere to decide if that special little thing would look good on one's own special little thing. And at certain times of the year, lingerie sales are targeted at men.

The collapse of the UK's largest (by number of shops) off-licence (booze) company, Oddbins, and its multiple brand names sent a shock through the industry: Oddbins did not waste money on expensive locations - indeed, its business relied on rush-in-rush-out-trade and convenient car parking was essential for it.

As ChiefOfficers.Net said at the end of 2010, 2011 would be a tough year for Retailers who, in 2008 and 2009 had relied on discounting existing stocks and not buying in much else. But when those stocks ran out, there would be a cash-crunch.

There was, but retailers borrowed to increase their inventory. And the shoppers did not come.

And in the period leading up to Christmas, retailers began their Christmas sales even earlier than usual. Discounts of 60 or 70% were common.

Home products retailer Habitat went into administration but financial problems seem to be standard operating procedure for Habitat for most of its existence. Jane Norman, a women's clothing retailer fell into administration as did Barratts, one of the last large shoe chains.

It's not over: as retailers fail, rents go unpaid and therefore so do commercial mortgages. The Chief Officers' Network predicted that the third quarter of 2011 would see that all come to a head. The timing may have been a bit off, but the principles are clearly developing.