High rents blamed for surge in insolvencies

High rents were today blamed for a surge in the number of companies being forced to the brink of collapse.

High rents were today blamed for a surge in the number of companies being forced to the brink of collapse.

Latest figures show a 34% hike in firms being placed into liquidation, receivership or examinership.

A study by FGS accounting and consultancy firm shows 469 companies went into administration in the first three months of the year compared to 351 for the same period last year.

As many as 1,900 companies face ruin during 2010 if the trends continue, according to the report.

Retail Ireland, the IBEC group representing the sector, said the insolvency figures confirmed the extent of the crisis facing retailers.

“Many of these insolvencies are due to the fact that during 2009 retailers were not able to respond to a fall in sales by reducing rents or commercial rates,” said Retail Ireland director Torlach Denihan.

“While most other suppliers to the retail sector reduced their prices many landlords used upward-only rent review clauses to increase rents and most local authorities did not reduce commercial rates.”

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