Dispatches look into The High Street Cash Crisis

TV highlight for Monday, March 22nd.

With Britain’s High Streets facing a fight for their future, an investigation by Dispatches asks who is really to blame for the collapse of many of the country’s best-known retailers.

Debenhams, Cath Kidston, Toys ‘R’ Us, Poundworld, Maplin and TM Lewin are among the retailers who have largely disappeared from our high streets in recent years. Many have pinned the blame on the pandemic and the rapid rise of online shopping while others have pointed to high business rates and rents.

But Dispatches reporter Antony Barnett probes behind the stories of a number of these failed brands and discovers they all have one thing in common – they were all once owned by private equity firms.

While these types of investors can sometimes be a lifeline for struggling businesses by offering a vital source of cash, the programme hears from critics who accuse them of focusing too much on short-term profits and loading companies with debt. This, they argue, starves them of investment or funds to react adequately to shocks such as coronavirus or rapidly changing retail fashions.

Dispatches have studied the accounts of private equity firms behind 10 well-known high street retailers that have foundered in the past three years.

Documents reveal that almost 29,000 jobs were lost when they entered administration or liquidation.

Their private equity owners made nearly £1bn in profits from their broader portfolio of investments during the period they owned these failing brands.

In addition to the human cost of those that have lost their jobs, the programme also discloses that business closures of these private equity-owned retailers have had a huge impact on the taxpayer:

These 10 brands, together, owed almost £50million to HMRC at the point of collapse. When Cath Kidston went under, the Government’s Insolvency Service, a taxpayer-funded body, had to pay £1million to cover staff redundancy payments.

The High Street Cash Crisis: Dispatches, Monday 22nd March, Channel 4, 8pm