The fall into administration this month of health and beauty chain Bodycare is yet further evidence that there is no sign of the post-Covid bloodbath on the High Street ending anytime soon. That’s certainly the view of UK retailers as they scale back investment plans, faced with the very real prospect of collapse.
The latest store closures follow Quiz, Monki, New Look, Hobbycraft and countless more so far this year. Major supermarket chains have announced sweeping redundancies.
The Confederation of British Industry (CBI) reveals in its quarterly survey of retailers that they intend to continue cutting investment. It blames generally weak consumer spending and rising costs for the balance of intentions of -42 (0% being neutral), mildly better than -46 % in May but still sharply worse than -27 in November 2024.
The £25bn rise in employers’ National Insurance contributions, among other cost hikes, has further dampened retailers’ recovery hopes; they have already been dashed by customer demand not responding to wages rising faster than inflation.
This fresh period of woe follows the crippling increases in energy and raw material costs triggered by the invasion of Ukraine in 2022. It’s little surprise that more than 17,000 retail stores are set to close in the UK in 2025, according to the Centre for Retail Research, up 27% on 2024.
Before the first Covid lockdown in March 2020, higher rents and painful business rates for physical stores were driving the retreat of retailers from town centres. They were already struggling to grip structural changes in the sector resulting chiefly from a migration of customers online.
Many left on the High Street or in retail parks are turning to Artificial Intelligence (AI) and automation, such as self-scanning, to battle rising staff costs. The ultimate impact of AI, which is already revolutionising retail warehousing and stock control, is unknown; the ‘given’ is that retailers under pressure need to be quick to adapt where they can, or take drastic action where their problems are existential.
It’s clear that further interest cuts aren’t kickstarting consumer spending and improving the retail environment. Those operators intending to survive need urgent strategies for:
- Tenancy and rent issues
- Store closures
- Stock control and working capital
- Technology and operating efficiencies
- Relationships with suppliers
- Trading with international partners
- Banking arrangements
- HMRC ‘time to pay’ plans
Buchler Phillips welcomes ‘no-obligation’ exploratory discussions with managers and owners of retail businesses to cover all the above factors and more.
Insolvency Service: watchdog turned rottweiler?
The Insolvency Service (IS) has set out an ambitious five-year plan to become the UK’s lead corporate crime enforcer. Its new strategy for 2026–2031 marks a decisive shift: from regulating insolvency after the fact to proactively disrupting fraud, money laundering and other economic crime.For years the IS was best known for chasing rogue directors and overseeing bankruptcies. In 2024/25 it disqualified over 1,000 directors and clawed back £3.7m through compensation orders. That work continues, but the strategy elevates tackling economic crime into a separate mission. The agency will now take the lead on fraud and money laundering cases where it has the edge. It is already investigating 2,000 companies suspected of exploiting dormant status for tax evasion and illicit finance.
The expansion builds on recent reforms. In 2021, the IS gained powers to pursue directors of dissolved companies, plugging a major loophole. The new paper signals more change ahead, including possible action against phoenix companies — firms ditched and reborn under near-identical names.
Much of this momentum comes from the Economic Crime and Corporate Transparency Act 2023 (ECCTA). Companies House got the headlines for its new powers, but the IS quietly acquired responsibility for 78 new criminal offences and joint oversight of eight more. These range from laundering through UK shell companies to failures in overseas property ownership filings.
The IS is also doubling down on collaboration. It promises tighter links with Companies House, HMRC, the NCA, FCA, SFO and devolved agencies. Recent joint operations, such as the removal of 11,500 suspect firms from the Companies House register, showcase the model it intends to replicate.
To sharpen its edge, the IS will roll out an “Intelligence Roadmap”: a new database to track corporate misuse, AI tools to prioritise cases, stronger digital forensics, and specialist financial crime expertise. The message is blunt: it will be “bolder” with intelligence and push for new powers where needed.
The expansion won’t be funded by the Treasury but through Companies House fees, tying enforcement more closely to corporate transparency reforms. Law firm Hogan Lovells says this raises questions: will Companies House act as gatekeeper on referrals? And will resources be stretched between insolvency and broader crime?
The warning signs are clear. Dormant and dissolved companies, opaque ownership structures, tax compliance and even employment practices are all in scope. Criminal sanctions are explicitly on the table. At the same time, the IS promises more guidance for directors, victims and the public.
If the strategy delivers, the IS could emerge as a UK equivalent to Australia’s ASIC — not just a regulator of insolvency, but a heavyweight corporate crime enforcer. The challenge will be execution. But the direction of travel is unmistakable.
Builders face more pain
Construction companies continue to top the insolvency tables month-on-month. The most recent quarterly figures to June show a hair-raising tally for the year: 3,984 collapses, accounting for 17% of all industry insolvencies in England and Wales.
The sector is suffering its longest continuous downturn since the early days of the Covid-19 pandemic. Construction output slumped again in August, according to the latest poll of purchasing managers from data provider S&P Global. Its construction index for August found that business activity fell for the eighth month in a row, although at slower pace than in July, and there were marked reductions in new work and employment.
Civil engineering was the weakest-performing segment in August, with business activity decreasing at the fastest pace since October 2020. Housebuilding activity also fell, raising questions about the government hitting its target for new homes.
S&P points to some positive signals on the supply side, as vendors’ delivery times shortened, subcontractor availability improved and purchasing price inflation hit a ten-month low. Nonetheless, these conditions largely reflect subdued demand and fewer new projects. The proportion of the index’s panel members expecting a rise in output over the year ahead was 34%, down from 37% in July and lower than at any time since December 2022.
It’s an inescapable fact that many businesses will need a cash injection to be able to undertake large projects, such as data centres. Cashflow problems already caused by late payment or bad debts are set to continue in the foreseeable future. The ongoing labour shortage could add more woe: while some redundant workers from failed companies might get snapped up quickly elsewhere, huge numbers have left the sector, either returning home to Europe or simply retiring. The skills gap in plumbing, bricklaying and other areas will need to be plugged by higher wages, further reducing margins.
The are no convincing signs of a construction recovery – and many companies will need to trade out of the red before taking full advantage of a better environment. Credit insurers agree that delayed projects, a lack of skilled labour, or a squeeze in worker supply could be the last straw for many. The construction sector remains poorly placed to absorb losses.
Payment persuaders stopped by High Court
The debt collection industry has taken several decades to shake off a poor reputation, not least in its treatment of those owing money. It is now properly regulated and works within a framework aimed to be constructive, as far as possible, for debtors. It is also a legitimate and, these days, a necessary tool for safeguarding the hard-earned cash flow of many businesses. However, sometimes these same enterprises face sharp practice from the ‘professionals’ who are supposed to be on their side.
The Insolvency Service has recently forced closure of three such operators based in the North East. EDC Group NE Ltd, UK EDC Ltd and UK TCF Limited have been shut down by the High Court after keeping more than £50,000 in funds they collected on behalf of clients.
The companies falsely claimed decades of experience despite being recently established, and used fake testimonials and misleading websites to deceive small businesses into paying upfront fees. Clients paid fees of hundreds of pounds but received no service, with the companies becoming uncontactable while bank records showed payments were made to the director, bookmakers and football clubs.
The companies targeted small businesses through unsolicited phone calls, using misleading information to convince them to sign contracts for debt collection services. Victims reported paying instruction fees and then being unable to reach collectors, despite assurances that recovered funds would be safeguarded.
False claims on the websites included descriptions of the companies as “market leaders” with “cutting edge collection activity technology” and 65 positive testimonials which presented an inaccurate picture of the companies as having a successful track record in debt recovery.
One victim paid £750 to UK EDC Ltd for collection of a debt of more than £20,000 but when the debtor made a payment of £12,143 it was collected by the connected company UK TCF Limited operating as ‘The Creditor’s Friend’. The victim was never informed of this collection and never received any of the money recovered on his behalf.
In another example, a woman who paid £600 to recover £15,000 in debts described how EDC Group NE Ltd claimed to have quickly found the debtors’ addresses and new business locations, even boasting of posing as a tax officer to obtain information.
The failure to provide financial records prevented investigators from establishing whether the companies operated independently or used phoenix practices – repeatedly closing and reopening under new names to evade responsibility and confuse clients.
Where contracted debt collection emerges as the last resort for businesses chasing payment, managers should take recommendations from regularly used financial advisers who have previous experience of using such organisations.
As ever, the Buchler Phillips approach to business challenges is ‘workout, not bail out’. Don’t hesitate to get in touch for an exploratory chat if your business needs help. Addressing the cracks now will, in many cases, avoid the need to start again.
Our helplines below are open for free initial consultations.
Jo Milner 07990 816904
David Buchler 07836 777748
Let’s get to work!
About Buchler Phillips
Buchler Phillips is an independent, UK based corporate recovery and restructuring firm, with an impeccable Mayfair heritage dating back to the 1930s.
Led by David Buchler, former Europe and Africa chairman of global consultancy Kroll Inc, our senior team is equally comfortable advising large corporations, Small & Medium Enterprises (SMEs) or individuals. In addition to decades of experience, each of our Partners brings to any given assignment unique independent insight, free from conflicts of interest, that is often sought but rarely found by clients or co-advisors.
The firm is sector-agnostic, but has particularly strong credentials in property; financial services; professional services; leisure and hospitality; retail and consumer; UK sports; media and entertainment; transport and logistics; manufacturing and engineering; technology and telecoms.
Our activities fall broadly, though by no means exclusively, into financial restructuring, including fraud and forensic investigations; operational restructuring and turnaround; expert witness services and recovery solutions for corporates and individuals.
This newsletter is published for the purposes of general information only and does not constitute advice. Any action taken by readers upon the information above is entirely at their own risk.