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  • Insolvency review - Week 30

     

    RCM Weekly review - July 2019 - Week 30

     

     This week: Mothercare in talks to offload stores as sales continue to drop and average Household incomes hit record high thanks to rising pay and lower taxes.

    26th July 2019

     Mothercare in talks to offload stores

    Mothercare in talks to offload stores as sales continue to drop

    Sky News have today reported that Mothercare are negotiating with ‎third parties with the aim to sell or franchise its UK stores. This news comes a year after its CVA was approved by creditors at the start of June 2018, in which 50 stores had been earmarked for closure. This was later increased to 60 stores in July 2018. Mothercare now operate just 79 stores, down from the 134 stores they had at the start of last year.

    Mothercare’s extensive store closure programme has severely affected its UK sales, with a 23.2% fall in revenues for the 13 weeks to July 13th. Online sales have also dropped, down by 12.1 per cent.

    Mark Newton-Jones, Chief Executive Officer of Mothercare plc, said, "We have continued to make good strategic progress in the first quarter in our transformation to deliver a sustainable and profitable future for the Mothercare brand. The UK retail market remains challenging and though the rate of decline in like for like sales has moderated, margin investment in promotional activity has been necessary to stimulate sales, both in our stores and online. The impact of this has negated much of the margin benefits we had expected to materialise”

    Read more here:
    https://news.sky.com/story/mothercare-recovery-falters-as-it-plots-uk-spin-off-11770744


    26th July 2019

     Average Household incomes hit record high

    Average Household incomes hit record high thanks to rising pay and lower taxes

    Today the ONS has released Average household income, UK: Financial year ending 2019.

    On average, households are now better off than ever before according to ONS statistics. Rising wages and lower taxes have combined to make families better off by £400 a year. Median household disposable income in the UK was £29,400 in the financial year ending (FYE) 2019, this is up by 1.4% compared with FYE 2018 when taking inflation into account.

    This continues a period of modest growth over recent years. Between FYE 2017 and FYE 2019 median income grew by an average of 0.7% per year compared with 2.8% between FYE 2013 and FYE 2017. This rise in median income has occurred during a period where the employment rate grew by 0.5 percentage points, while real total pay for employees increased by an average of 1.0% across the 12 months in FYE 2019 compared with FYE 2018.

    Mean and median income, 1977 to FYE 2019, 1977 = 100

    Mean and median income, 1977 to FYE 2019

    Source: Office for National Statistics – Living Costs and Food Survey

    Read the Full ONS report here:
    Average household income, UK: Financial year ending 2019


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