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Bankruptcy
The number of companies that are failing is increasing rapidly in retail, catering and construction. More and more companies are also stopping before it is too late. This is evident from the most recent figures from the Chamber of Commerce (KvK).
Peet Vogels (AD)
October 17, 2023
Last quarter, the number of bankruptcies doubled, compared to the third quarter in 2022, to 832. This is the sixth quarter in a row that the number of bankrupt companies has increased.
The Chamber of Commerce speaks of a trend break. The number of starters is decreasing and the number of quitters and bankruptcies is increasing. “That is indeed a trend break,” says Michiel Hordijk, director of IMK, a consultancy firm for small and medium-sized businesses (SMEs). That comes as no surprise, he says A.D. “We see that the number of quitters is increasing, which is good.”
Also read: More and more catering establishments have to close due to high costs and debts
Retail and catering are having a hard time since corona
During the corona period, many SMEs have been granted a deferral of tax payments. That tax still has to be paid. “About 230,000 companies have a repayment arrangement with the tax authorities,” Hordijk sees. “We think that 80,000 to 100,000 companies will not be able to pay off their debt.” A significant increase in the number of bankruptcies is expected, especially in the catering and retail sectors.
The Chamber of Commerce figures indeed show that the retail trade and catering industry, together with construction and logistics companies, are often affected by bankruptcy. But that is no reason to panic, according to Marcel van den Berg, director of Faillissementsdossier.nl, a company that keeps track of all bankruptcies. “The retail sector and the catering industry have been struggling since corona.”
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Repayment of tax debt
Van den Berg points to structural causes. “We are buying more and more online. That trend continues.” Hordijk points to the collapse of large retail chains. “They attract people to the shopping street. If those shops disappear, fewer people will come to the shopping street and that will affect the other shops.” In addition, shops have higher costs due to wage increases, rent increases and more expensive energy.
These problems also apply in the catering industry. Koninklijke Horeca Nederland, the trade organization for the catering sector, estimates that 12 percent of catering companies are experiencing financial problems due to the mandatory repayment of the tax debt.
Not a tidal wave of failing companies
The number of companies going bankrupt is increasing rapidly, but it still concerns a limited number of companies. “We have had years when ten thousand companies went bankrupt. Now we are at three thousand to four thousand. That is a normal number,” said Van den Berg.
Hordijk expects that the number of bankruptcies will increase, but does not see a tidal wave of collapsing companies. He assumes that many entrepreneurs want to avoid bankruptcy. “I think many companies are going to stop. That is wise, then you prevent bankruptcy and high debts with all the misery that entails.”
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Mental problems due to making payments and not earning anything
Some of the quitters can no longer mentally cope with continuing, Hordijk sees. “Entrepreneurs aged 50 or older who see that they will only be paying off payments in the coming years and will not earn anything. And then they also have to invest in sustainability. Those entrepreneurs think: what am I doing this for? And decide to stop.”