Retail insolvencies signal a sector still on shaky ground

The fashion industry is no stranger to disruption, but the latest insolvency figures underline a worrying truth: retailers are still operating on borrowed time. While the month-on-month drop in retail insolvencies from 177 in October 2025 to 158 in November 2025 may offer a momentary sigh of relief, the broader trend is far less comforting. Insolvencies are still 14 percent higher than the 138 recorded in November 2024, a clear sign that the sector’s resilience is being tested, and tested hard.

The Golden Quarter, historically the lifeline for fashion retail, failed to deliver the sales uplift the industry so desperately needed. Despite hopes for a last-minute surge across Black Friday and Cyber Monday, the data suggests that consumers simply did not turn up in the numbers required to reverse the damage of a difficult year.

This mismatch between expectation and reality is captured sharply in the words of Gordon Thomson, restructuring partner at RSM UK. He notes that insolvencies fell month-on-month because retailers “hung on” in the hope of late-year spending. But he also warns that the year-on-year increase in insolvencies is “concerning,” and points to a bleak forecast for 2026 unless consumer confidence returns.

The Christmas hangover is becoming a structural problem

The problem isn’t merely a slow festive season; it’s the mounting pressure retailers face in a market where consumers are prioritising saving over spending. Thomson highlights that nearly 60 percent of consumers plan to save more or maintain their current savings rate over the next three months.

Even before the new year begins, retailers are already bracing for a “double whammy” of cost increases. Business rates and a rise in the national minimum wage in April threaten to push already fragile balance sheets beyond breaking point. For many brands, this will not be a matter of tightening belts, but a question of survival.

The message is stark: if fashion retailers don’t start re-evaluating their operating models, more closures are inevitable. And yet, the sector is still in a state of denial about how quickly the landscape is changing.

Fashion retail has never been easy, but today’s environment is uniquely brutal. The market is saturated, competition is fierce, and consumers have become increasingly selective. The days when footfall alone could sustain a brand are long gone. Retailers now need to combine sharper product curation with smarter operations and better customer experience.

Thomson argues that retailers must “keep up with trends,” monitor spending closely, and use technology to drive efficiencies. The tools exist - from inventory management systems to AI-driven pricing and personalised marketing, but the ability to implement them effectively is the real differentiator. For many fashion businesses, this is where the challenge lies. They may have the creativity, but not the infrastructure, capital or expertise required to pivot at speed.