Latest insolvency figures give ‘little indication’ of what’s to come

The number of companies entering insolvency procedures in the first quarter of 2020 in England and Wales, according to figures released by the Insolvency Service, decreased when compared with the previous quarter (Q4 2019) and the same quarter last year (Q1 2019).

There were 3,883 total company insolvencies in Q1 2020. Insolvencies decreased by 8.5% from Q4 2019 and also decreased by 8.5% from the same quarter in the previous year.

Creditors’ voluntary liquidations (CVLs) were the most common type of company insolvency, accounting for over two-thirds (70%) of cases, followed by compulsory liquidations (18%).

Furniture manufacturer insolvencies totalled 36 during the first quarter of 2020, down by 7.6% compared to 39 against the same period last year.

On a quarter-to-quarter comparison, Q1 2020’s figure increased 56.5% from 23 in final quarter of 2019.

Insolvencies of household equipment retail businesses, which includes furniture retailers, stood at 42 during the first quarter of 2020, down 26.3% from 57 recorded in the same quarter last year. Compared to Q4 2019, the figure was also 42.

Wholesalers of household goods saw 34 insolvencies reported, down 33.3% from last year’s figure of 51 and 15% last quarters number of 40.

Insolvencies in the manufacture of other textiles sector, which includes carpets, soft furnishings and other household textiles, resulted at 12 during Q1 2020, up by 9% on last year’s total of 11 and 50% on the previous quarter’s eight filed.

Commenting on the recent data, the Insolvency Service said: “Not unsurprisingly, the sectors most effected remain construction, retail and accommodation/food services.

“Whilst there have been some high-profile failures, most of these businesses were facing difficulty before the Covid-19 crisis. These latest figures give little indication however of what may be to follow with such a change in trading conditions resulting from the UK and worldwide lockdowns.”

Adding to this data, Inside Furniture conducted a search through the London Gazette and found that 54 furniture related companies have entered insolvency proceedings from the start of March to the end of April. There were also 12 carpet business and two soft furnishings related filings during the period analysed.

For up-to-date furniture and flooring industry insolvencies, visit the Insolvencies page.