According to the specialized firm Altares, “the level of failures increases by 69% compared to the summer of 2021, a rate not observed for 25 years”.
Business failures increased at a record pace this summer in France, where “the return to pre-COVID standards is accelerating”, according to a study published Monday by the specialized firm Altares.
“With 8,950 insolvency proceedings opened between 1is July and September 30, the level of failures increases by 69% compared to the summer of 2021, a rate not observed for 25 years”, noted the firm which accounts for all the openings of proceedings with the commercial courts.
Over 12 rolling months, “the bar of 38,000 insolvency proceedings has been exceeded for the first time since the summer of 2020”, according to Altares, who adds that this is an “increase of 10,000 failures over one year, which does not however bring France back to default levels of September 2019”, before the health crisis, with 53,500 failures in one year.
The increase was particularly high for SMEs with 20 to 49 employees, whose number of defaults more than doubled over a year this summer to reach 186 open procedures, approaching the level of summer 2019, which was 193 procedures .
By sector, the increase exceeded 200% in fast food, reached 115% in online sales and 109% in clothing.
The industry recorded an increase of 85%, to 688 defects, driven by food (297 defects, or +141%).
The degradation is also very significant for hairdressing salons and beauty salons (+94%), while agriculture limits the increase in the number of failures to 11%.
By region, the loss ratio of companies doubles in Hauts-de-France, which finds a situation equivalent to that of 2019, while “the PACA region seems to resist best”, according to Altares.
During the COVID-19 crisis, fragile companies had been protected by government support measures, such as relief or facilitation of payment of social security contributions and state-guaranteed loans (PGE) which supported their cash flow.
Thus, the loss rate observed in the third quarter of 2021 had been the lowest ever observed in 25 years.
Last summer, nearly three quarters of the proceedings opened with the commercial courts were direct judicial liquidations, a rate higher than that before the health crisis (68%). Legal reorganizations accounted for 24% of the total, while safeguard procedures are still few in number, even if their number (229) exceeds the pre-crisis level.