Licensed insolvency practitioner, Molly Monks has shared the real reasons why retailers such as BHS and Debenhams failed to stay afloat in challenging financial times
As rising insolvency rates continue to affect UK businesses, a leading insolvency expert has revealed the hard lessons directors must learn. With interest rates remaining high, inflation squeezing margins and consumer confidence still shaky, financial pressure is mounting across multiple sectors – leading to a steady stream of administrations and restructuring deals.
Molly Monks, Licensed Insolvency Practitioner and founder of Parker Walsh, says many of these well-known companies showed clear warning signs before their downfall – but directors often failed to act in time. “By the time most directors seek help, options are already limited,” said Mrs Monks.
“These big-name insolvencies aren’t just cautionary tales – they’re real examples of what happens when decisions are delayed, issues are ignored, or leadership becomes disconnected from the numbers.”
1. BHS (British Home Stores) & Retail Acquisitions Ltd
The fall of BHS in 2016 remains one of the most talked-about retail failures. Purchased by Retail Acquisitions Ltd for £1, saddled with a massive pension deficit, it continued trading despite mounting losses. A recent wrongful trading claim found former directors personally liable, citing mismanagement and decisions that deepened insolvency.
Mrs Monks, who was appointed Liquidator of Retail Acquisitions Ltd, was directly involved in the aftermath of the collapse.
“One of the starkest lessons from BHS is that directors cannot ignore early financial warning signs,” she said. “Once your creditors outweigh your income, or pension obligations become unsustainable, it’s almost always worse value, both financially and reputationally, to wait.”
2. Arcadia Group (including Topshop, Miss Selfridge etc.)
The collapse of Arcadia in 2020 triggered waves through UK retail. Changing consumer habits, high rental costs and failure to modernise left a once‑dominant group exposed. Directors had opportunities to pivot but often clung to outdated models.
For many smaller businesses, the lesson is clear: adaptability isn’t optional. If you find your business model unfit for current customer behaviour you should act fast.
3. Debenhams
When Debenhams finally collapsed into administration, many saw it as the inevitable conclusion of decade-long declining footfall and outdated store formats. What stands out are the attempts at rescue via CVAs (company voluntary arrangements) which postponed the end but didn’t ultimately stop it.
Mrs Monks said: “CVA tools can buy time but they are not a substitute for a realistic turnaround strategy. When CVAs become a way to defer the inevitable rather than solving the core issues; the losses, debt service or changing market, the deeper problems multiply.”
4. The Body Shop
While less dramatic in its collapse than some others, The Body Shop’s insolvency history (through owners and corporate parent shifts) still offers warnings.
Brand identity and ethical positioning are powerful but don’t protect from financial mismanagement, overexpansion or cashflow issues.
Mrs Monks, who met The Body Shop’s founder Anita Roddick during her work advising women in business, said: “Values matter but they must be backed up by solid financial discipline. Ethical reputation alone won’t save your balance sheet.”
She added: “It was inspiring to meet a female business leader like Anita. But even with a strong vision and purpose, companies still need rigorous financial planning, especially in times of change. As one of the few female Insolvency Practitioners, I know how important it is to blend purpose with pragmatism.”
5. Wilko
Wilko’s failure shocked many because its decline was more recent and unexpected. Brexit costs, inflation, supply chain problems and rising energy prices squeezed margins so tightly that it became unviable.
For businesses today, the lesson is: always stress‑test your business for external shocks. Having reserves, flexible contracts and contingency plans isn’t just prudent, it’s essential survival prep.
Key takeaways
Molly Monks of Parker Walsh sees common threads through all these high-profile failures:
- Don’t wait until cash flow problems are obvious – acting early gives far better options for rescue or restructuring.
- Transparent reporting and advice – directors should often seek external or internal professional advice, properly document decisions and take creditor interests seriously.
- Realistic business model reviews – if what you’re doing no longer matches what customers want, or costs have shifted, you must adapt or risk being left behind.
- Avoid debt traps – piling on debt to cover shortfalls without a firm plan for how to repay or reduce it opens up liability risk.
- Use CVAs, administrations or liquidation wisely – each has pros and cons. A CVA may delay collapse but if it’s masking long-term decline – it can make matters worse.
#High #Street #names #showed #warning #signs #demise #bosses #didnt #act #time
