FOI release

FOI22/23-041 - Insolvencies in the clothing sector

Published 18 January 2023

Our ref: FOI22/23-041

Re: Freedom of Information Act (FOIA) Request

Thank you for your email of 20th July in which you requested from the Insolvency Service:

“I am writing a white paper for our company about digital transformation in the UK clothing/apparel sectors. In order to support this work I would like to present the number of insolvencies experienced by a number of related sectors over time. The sectors I am examining are (based on 2007 SIC codes) as follows:

14 - manufacture of wearing apparel (comprising 14.1 Manufacture of wearing apparel, except fur apparel; 14.2 Manufacture of articles of fur; 14.3 Manufacture of knitted and crocheted apparel) - aggregate numbers. I don’t require the three specific sub-sectors as separate series

15  - manufacture of leather and related products (comprising 15.1 Tanning and dressing of leather etc; 15.2 Manufacture of footwear) I don’t require the two specific sub-sectors as separate series

46.42 - wholesale of clothing or footwear

47.71 - retail sale of clothing in specialised stores

47.72 - retail of footwear + leather goods in specialised stores

Ideally I would like a series for each of the 5 SIC codes listed above from 2007 to 2021, as I’m trying to show the increase in insolvencies during recessionary periods.”

You also requested:

“Further to my request below, if at all possible, could you restrict the number of insolvencies to larger businesses only (say, greater than 10 employees or greater than £10m revenue)? That would be especially helpful but understand if the broader universe is easier to deliver.”

Data on the size and revenue of companies is not held by the Insolvency Service and therefore we are unable to restrict the numbers to larger businesses only.

Your original request has been dealt with under the Freedom of Information Act 2000 (FOIA).

I can confirm the agency holds the information that you have requested. I have provided two tables at Annex A. Table 1 shows the number of company insolvencies for 2 Digit SIC codes 14 and 15 for England and Wales, Scotland and Northern Ireland from 2007 to 2021 by quarter. Table 2 contains the number of company insolvencies for 4 digit SIC codes 4642 and 4772 for England and Wales, Scotland and Northern Ireland from 2007 to 2021 by calendar year quarter.

Under section 16 of the Act (Advice and Assistance) you may find it useful to note:

Compulsory liquidations in England and Wales are sourced from a live administration system managed by the Insolvency Service. The registration date for these is the court order date. All other insolvency procedures are sourced from Companies House, with the registration date based on the date that an insolvency was registered at Companies House. Industry breakdowns have been presented in line with the Standard Industrial Classification (SIC 2007). Compulsory liquidations data are recorded at a three-digit group level and not a five-digit class level. Where possible, this administrative data has been matched with Companies House data to produce a five-digit class level industry classification, but in some cases a five-digit class is not attainable. The totals in the four-digit table may therefore be an undercount as these companies without a four- or five-digit SIC code have not been included.

The industry breakdown provided is continuous from 2007 however data prior to 2010 is all taken from Companies House and therefore totals have not been calculated with the same methodology as the post Q1 2010 data.

Company insolvency in Northern Ireland and Scotland is governed by separate, though broadly similar, legislation to England and Wales. Numbers of compulsory liquidations in Northern Ireland are sourced from Companies House. This contrasts with the numbers in the published Quarterly and Monthly insolvency statistics, which are sourced from the Department for the Economy. Therefore, comparisons between these numbers and those published may not be valid.

Industry breakdowns have been presented in line with the Standard Industrial Classification (SIC 2007). Companies are assigned to a sector (or industry) at the time of registration at Companies House. However, a company may have changed its primary business since first registration, or the industry sector might be recorded as that of its holding company and appear under “activities of holding companies” within the Business. The industry SIC code for compulsory liquidations in England and Wales is recorded with SIC 2003 codes. To obtain SIC 2007 codes for these, companies are matched against the Companies House register where possible, and SIC data are drawn from this source. Where matching is not possible, the 2003 SIC code has been converted to a 2007 code using a ‘best match’ approach using weighted tables provided by the Office for National Statistics.

Companies with multiple insolvency procedures are included multiple times to give a full record of all registered insolvencies. Administrations which have directly resulted in a creditors’ voluntary liquidation are included only as administrations. Similar information for administrations converting to a compulsory liquidation or to a company voluntary arrangement is not available so these are counted as both insolvency procedures.

These statistics may not equal the sum of the monthly numbers separately presented in the Monthly Insolvency Statistics. Data used to compile both reports were extracted at different times of the month, and some of the methodology used to compile the monthly statistics differ. Full details of the differing methodology can be found within the Quarterly Statistics Methodology and Quality document.

These statistics may also not align with information published separately by Companies House, or with data extracted from the Gazette. Further information on why numbers may not align can be found in the Quarterly Statistics Methodology and Quality document.

Please note FOIA only applies to recorded information, it does not require public authorities to answer a question unless recorded information exists. Therefore, to answer a request FOIA does not oblige a public authority to create information if the requested information is not held.

If you are not satisfied with the response we have provided you and would like us to reconsider our decision by way of an internal review (IR), please contact our Information Rights Team at foi@insolvency.gov.uk or by post at:

Information Rights Team

The Insolvency Service

3rd Floor

Cannon House

18 Priory Queensway

Birmingham

B4 6FD

United Kingdom

You also have the right to contact the Information Commissioner’s Office (ICO) if you wish for them to investigate any complaint you may have regarding our handling of your request. However, please note that the ICO is likely to expect an IR to have been completed in the first instance.

Yours sincerely,

Information Rights Team

The Insolvency Service