Newly updated data from ASIC this week shows that retail insolvencies across Australia have peaked at 1,043 in the FY25 financial year to June 1.
This includes all appointments over a company, including the first, subsequent and transitional appointments.
The FY25 numbers for retail so far are 80 more than FY24, which then peaked at 963 for the full year. They are also more than double the amount of retail insolvencies in FY22.
FY25 numbers for retail include an array of fashion brands that called in administrators over the last year, including footwear brand Wittner, apparel brand Jeanswest, designer label Tuchuzy, and fashion retail group Mosaic Brands, the company behind retailers such as Noni B, Rivers, Katies and Millers.
The peak in retail insolvencies comes as total insolvencies across all industries remain elevated, with 1,830 total appointments recorded in May. This is up 7 per cent on last month, and 16.1 per cent up on the same month last year.
However, it is below recent peaks above 1,900 in recent months this year.
Across the industries, retail comes in at fourth place in terms of total recorded insolvencies for FY25 to date. At the top of the list is construction, with 4,458 insolvencies recorded in the current financial year, followed by accommodation and food services (3,005) and ‘other’ services (1,916).
These numbers are expected to increase once the June 2025 numbers are tallied.
Despite the bleak picture, financial services firm CreditorWatch has been reporting that insolvencies in Australia are levelling out in 2025. Data from the firm indicates that total insolvencies are down 0.9 per cent from April 2025 to May 2025, and have dropped 12 per cent from their November peak. This is similar to ASIC data, which shows total insolvencies in November 2024 hit 1,931, with May 2025 numbers at 1,830.
CreditorWatch also reported that B2B payment defaults dipped 11.8 per cent in May and are down 18.3 per cent from their peak in December.
According to the financial firm, the plateauing of both B2B payments and insolvencies suggests some of the pressures on businesses from higher costs and constrained consumer spending may be beginning to be balanced out by the favourable impacts of last year’s income tax cuts, other cost-of-living support measures, the start of interest rate relief and a slower rate of cost increases.
“This levelling off of insolvencies has been long awaited and is very welcome, but we need to remember that several industries still face significant challenges, particularly those exposed to discretionary spending,” CreditorWatch CEO Patrick Coghlan said.
“Post-COVID, we’ve seen inflation hit 30-year highs. Those rapid price increases across the economy don’t reverse when the inflation rate comes down again – the higher prices are locked in and remain as permanent pressures for businesses.
“They’re generally passed on to consumers, but this is very difficult for businesses in sectors such as hospitality. If the price of a sandwich at a café goes up by three or four dollars, people can very easily go elsewhere or bring their lunch from home.
“We won’t see conditions improve sustainably for businesses in discretionary sectors until consumers see their wages grow ahead of costs for some time.”
CreditorWatch chief economist Ivan Colhoun added that the upcoming lift in the National Minimum Wage on July 1 will benefit consumers but apply further pressure on businesses, particularly in retail and hospitality.
“The good thing is that we will likely see these funds recycled into the economy,” Colhoun said. “Interest rate relief by the RBA, as inflation has moderated, should also improve cash flow a little for both consumers and businesses alike.
“One aspect we are watching as insolvencies pressures switch from construction and hospitality to other services sectors, is whether there is the possibility for greater impact on the broader macro-economy. A striking feature of the prior rise in insolvencies has been the degree to which small companies, particularly those employing less than five people and sole traders have been impacted.”