Alistair McAlinden, Managing Director at Interpath provides highlights from his R3 Scotland Forum talk on the reasons behind recent retail restructurings.
Retail remains one of the UK’s most important sectors, both economically and socially. In 2025, the British Retail Consortium (BRC) estimated that 2.8 million people worked in retail across the UK, representing around 10% of all private sector jobs.
For restructuring professionals, retail has been one of the busiest sectors of the past 18 months. In the first half of 2026, well-known names including Claire’s Accessories, Quiz, The Original Factory Shop, Beauty Bay and Russell & Bromley fell into administration, while others including Magnet Kitchens and Poundstretcher entered into company voluntary arrangements (CVAs) or put forward restructuring plans.
What is clear is that restructuring activity has not been confined to the usual suspects. Stress and distress have been seen across store-led operators, online businesses and even discounters, a part of the market that has historically held up well when household budgets come under pressure.
Why retailers are struggling
The reason is that trading has remained uneven and subdued. BRC data consistently shows sales remain seasonal, shaped by the unpredictability of the British weather and key holidays such as Easter and Christmas. In June, for example, sales growth was supported by hot weather and the World Cup, lifting demand for fans, air-conditioning units, clothing and electricals.
Food sales remain comparatively resilient, while non-food is more variable. There is also a broader structural point: retailers are not only competing with each other for a constrained household wallet, but with leisure, hospitality, health and beauty services, gyms, subscriptions and ultra-low-cost online marketplaces.
Footfall data paints a similarly mixed picture. While the recent heatwave boosted some spending, it also kept shoppers away from stores, and footfall continues to fall across high streets, shopping centres and retail parks.
Stores still matter in a digital market
Physical retail is not becoming irrelevant. Around 70% of sales are still made through bricks-and-mortar stores. While online penetration has moved from roughly 20% pre-pandemic towards 30% today, stores remain central to the retail experience, particularly where they are integrated with digital channels.
This channel mix matters. Successful retailers are paying close attention to how and where people choose what they buy and are adapting their offer accordingly.
Cost pressures continue
Retailers are operating against a backdrop of weak consumer confidence, rising costs, geopolitical instability and persistent cost-of-living pressure.
The emphasis now is on maintaining sales, protecting margins and managing ongoing cost pressures. Sourcing has become especially important. Geopolitical instability, including conflict in the Middle East, continues to affect fuel, energy and freight costs, while cost-of-living pressure limits retailers’ ability to pass increases on to consumers without risking volume declines.
Artificial Intelligence is beginning to play a visible role, especially online. Younger consumers are increasingly comfortable with recommendation-led shopping journeys, where platforms use purchasing behaviour, peer reviews and predictive tools to shape the customer experience. AI investment can support conversion and customer engagement, but cannot compensate for poor stock availability, clunky fulfilment or weak brand positioning.
Creating value
So, against this backdrop, where can value be created and how can we, across the restructuring profession, help?
For stressed retailers, the answer cannot simply be to invest more. Turnaround plans need to be phased, with the first priority often being to release cash from the existing operating model. That means focusing on buying margins, supplier collaboration, stock allocation and range discipline, ensuring capital is not tied up in the wrong products, channels or locations. Getting those fundamentals right can create the liquidity needed to support investment in technology, stores, fulfilment or customer experience.
Physical stores also need a clearer role. They have to work harder, as a brand touchpoint, service hub, collection and returns location and, in the best cases, a destination in their own right.
For investors, the opportunity increasingly lies in platforms, flexible formats and mixed-use environments. The appeal of models such as Next Total Platform is that they allow brands to plug into established digital and logistics infrastructure rather than building everything themselves. Of course, having a property strategy fit for today’s trading environment matters too.
Early intervention preserves options
All of this has direct implications for restructuring professionals. As in most of our work, timing remains critical. The earlier boards seek advice, the more options can be preserved and the greater the prospect of protecting value.
At the underperformance stage, work often centres on identifying what is driving the decline. Detailed analysis of profitability by stock line, channel and location can give management teams a clearer basis for decision-making which can be enough to reshape the business before financial stress becomes acute.
Once cash pressure emerges and creditor arrears build, the focus turns to forecasting, cash preservation, cost action and stakeholder management. Maintaining stakeholder confidence depends on robust information and a credible turnaround plan.
Using the right restructuring tools
When distress becomes critical, a range of restructuring tools remain available. Pre-pack administrations can preserve trading continuity and customer confidence where there is a viable core business or platform. CVAs remain useful where lease liabilities need to be addressed, and restructuring plans have proven their value in larger, more complex cases.
Even where a solvent future is no longer available, insolvency practitioners can still maximise recoveries for creditors through intelligent trading strategies, stock realisation and active customer engagement.
Despite the challenges, this remains a sector where value can be protected and created when action is taken early and decisively. Retailers that focus on operational fundamentals, invest in the right channels and stay close to customer behaviour can still outperform.
Restructuring advisers can help management teams to act early, rebuild stakeholder confidence and create the conditions for sustainable recovery, even where confidence remains fragile. Like the retail sector itself, innovation by restructuring professionals is essential for successful outcomes.
