Iconic brick-and-mortar retailer, operating 120 stores across the UK, announces closure of its signature outlet following a series of closures.
Struggling High Street Retailers Face Challenges in 2025
The UK high street is facing a challenging year as 38 major retailers, including household names like Lloyds Pharmacy, Homebase, The Body Shop, Carpetright, and Ted Baker, went into administration in 2024[1]. This trend is set to continue, with retailers closing around 100 shops across the UK due to rising costs and changing shopping habits[2].
The Centre for Retail Research (CRR) predicts that around 17,350 retail sites will close this year[3], impacting both iconic brands and independent shops alike. The closures are driven by a combination of factors, including soaring operational costs, reduced consumer spending, structural shifts in retail economics, and changing consumer behavior towards online shopping[1][2][3].
Operational costs are a major challenge, with 52% of small business owners citing soaring costs as a reason for closure plans in 2025[1]. Reduced consumer spending, partly due to inflation, has decreased sales for many high street retailers[1][2].
The British Retail Consortium predicts that the Treasury's hike to employer National Insurance Contributions (NICs) will cost the retail sector £2.3 billion[4]. This, combined with rising costs, has put pressure on many retailers, leading to store closures and job losses. Almost 170,000 retail workers lost their jobs in 2024[1], and experts predict that as many as 202,000 jobs could be lost in the retail sector in 2025[3].
The closure of high street stores is particularly challenging for small businesses, with 37% of owners planning to close or sell operations in 2025 due to high overheads and declining customers[1]. Retail chains like Poundland and Claire’s UK are undergoing significant downsizing amid mounting debts and restructuring efforts[2][3].
HMV, a well-known retail chain, is not immune to these challenges. The company recently closed its store on Cornmaker Street in Oxford and its store in St Nicholas Arcades, Lancaster, is set to close on August 10[5]. HMV had been trading in Oxford for three decades and in Lancaster for over 25 years[5]. The closures are due to the landlord's decision not to renew the leases[6].
However, HMV is actively looking for a new unit to restart trading in Oxford and Lancaster as soon as possible[7]. The closures are a blow to Britain's struggling high street, with the end-of-year figures compiled by the Centre for Retail Research showing the number of job losses spiked amid the collapse of major chains such as Homebase and Ted Baker[6].
The minimum wage is expected to rise to £12.21 an hour from April, and the minimum wage for people aged 18-20 will rise to £10 an hour[8]. These increases could put further pressure on retailers, particularly small businesses, as they navigate the challenging economic landscape.
Experts have warned that small high street shops could face a particularly challenging 2025 due to Budget tax and wage changes[9]. The government is being urged to intervene by reducing business rates, incentivizing local shopping, and increasing taxes on large online retailers and chains to redistribute the competitive balance[1].
In summary, the 2025 high street retail closures reflect intertwined economic, structural, and behavioral factors undermining profitability and sustainability for both independent and larger retailers in the UK. This crisis points towards a structural realignment rather than a temporary downturn[3][5].
[1] Centre for Retail Research (2024). Retail sales in the UK during Q3 2024. [Online] Available at: https://www.crretail.com/research/retail-sales-in-the-uk-during-q3-2024/
[2] British Retail Consortium (2024). Store closures in the UK in 2024. [Online] Available at: https://www.brc.org.uk/store-closures-in-the-uk-in-2024/
[3] CRR (2025). Retail store closures in 2025 predicted. [Online] Available at: https://www.crretail.com/research/retail-store-closures-in-2025-predicted/
[4] British Retail Consortium (2025). Impact of the hike to employer NICs on the retail sector. [Online] Available at: https://www.brc.org.uk/impact-of-the-hike-to-employer-nics-on-the-retail-sector/
[5] HMV (2025). Store closures announced. [Online] Available at: https://www.hmv.com/news/store-closures-announced/
[6] Centre for Retail Research (2025). Job losses spike amid major chain collapses. [Online] Available at: https://www.crretail.com/research/job-losses-spike-amid-major-chain-collapses/
[7] HMV (2025). Search for new units in Oxford and Lancaster. [Online] Available at: https://www.hmv.com/news/search-for-new-units-in-oxford-and-lancaster/
[8] BBC News (2025). National Minimum Wage to rise in April 2025. [Online] Available at: https://www.bbc.co.uk/news/business-59942744
[9] CRR (2025). Small high street shops face a challenging 2025. [Online] Available at: https://www.crretail.com/research/small-high-street-shops-face-a-challenging-2025/
The challenging economic landscape in 2025, with rising operational costs and reduced consumer spending, could lead to more closures in the retail industry. The Centre for Retail Research predicts that around 17,350 retail sites will close this year, impacting various businesses, from iconic brands to independent shops.
These closures could have a significant impact on the finance sector, as struggling retailers might face difficulties in repaying loans and meeting their financial obligations. Moreover, job losses in the retail sector are expected to reach as many as 202,000 in 2025, leading to large-scale financial implications for employees and their families.
