The current run of wind-ups, administrations and restructures across Australian retail are set to continue and possibly get worse over the next year, a retail insolvency expert warns.
FTI Consulting’s head of retail and consumer products, Kate Warwick, revealed that forward-looking indicators such as persistent input cost inflation, slowing revenue growth and rising taxation office and trade payment default rates point to a steady build-up of financial pressure on retailers, with a corresponding uptick in insolvencies likely over the period ahead.
This comes as long-running brands and retailers hit the wall, including 134-year-old shoewear brand Betts, which is closing down another 20 stores to be left with 15. A massive drop from the 220 stores that Betts operated two decades ago.
Other major casualties over the last two years include Stax, GeedUp, Glue Store, Lincraft, Stateside Sports, Secrets Shh, Exotic Athletica, Wittner, SurfStitch, Ally Fashion, Jeanswest, Tuchuzy, Designerex and Mosaic Brands.
The extent to which individual businesses can avoid these outcomes, Warwick said, will largely come down to capital discipline.
“This includes a cautious approach to inventory which includes range and SKU rationalisation, tight cost control, and capital expenditure directed only toward projects with a clear, demonstrable impact on profitability and efficiency,” she said.
The expected uptick in insolvencies over the next year comes as retail collapses are already peaking. ASIC insolvency data shows that first-time appointments in retail alone nearly hit 1,000 in FY26, above the 871 recorded in FY25 and well-above the 319 recorded in FY22 – post-COVID.
All insolvency appointments in retail, including subsequent and transitional, hit 1,238 in FY26, up from 1,152 in FY25 and 406 in FY22.
Warwick said she and her team are seeing a degree of catch up from recent years of stimulus and then solid growth – “albeit largely inflation driven” – which is now moving to genuine structural pressures with notable impact on segments exposed to supermarket competition and the softening of discretionary spend.
“Whilst premium and low-cost retailers seem to have greater resilience by virtue of their clear and differentiated value proposition, our assessment is that the businesses caught in the middle are the ones that are most at risk of distress.”
Many of the aforementioned casualty brands, such as Glue Store, Wittner and Jeanswest, priced their products within the mid-range.
Warwick added that a common pattern in distressed retailers is that declining brand equity and weakening price power pushes management to chase results and cash through heavy discounting. This erodes margins in the process.
“We’re seeing in some longer-standing brands that this sits alongside a lack of investment in operational discipline, such as shortened critical paths, tighter open-to-buy processes, and digitalised demand forecasting,” Warwick said. “In combination, this margin compression without cost efficiency can become unmanageable.”
FTI Consulting in particular is managing the receivership of Stax currently, and has been involved with a few of the aforementioned casualties.
On receiverships in particular, which are generally initiated by a secured creditor such as a bank or lender, Warwick said the fundamental question for the business and parties involved is whether there is, or could be, a viable business proposition.
Warwick said that a brand with a genuine underlying proposition can either stand on its own or become strategically valuable to the right acquirer.
The other critical variable in receiverships is funding. The more funding there is available Warwick explained, the longer the timeline can be afforded for a sale process to run, which widens the buyer pool and ultimately improves the likelihood of the brand surviving as a going concern.
“Struggling retailers should always seek advice sooner rather than later,” Warwick said. “The longer a business waits, the fewer options remain.
“Decision-making authority progressively shifts away from management toward lenders and other creditors focused on reducing risk and recovering their debts.
"Early intervention creates room to act, including tightening operational disciplines, rightsizing the cost base, renegotiating lease commitments, addressing inventory, stabilising liquidity, and other key steps, which together buy critical time and funding to support the turnaround.”