LANDLORDS pressurising struggling businesses over rents could “kill” the High Street, it is claimed.

An insolvency expert says property owners and councils should ease demands on traders as web-based trade takes a bite out of sales.

Eileen Blackburn, head of restructuring and debt advisory at Glasgow accountancy firm French Duncan, said: “The High Street remains an integral part of our economy and is facing many major difficulties from rent, from business rates, and competition from online retailers.

“There is only so much money that can be generated from a high street outlet and with landlords and councils seeking to maximise their returns through rent and business rates respectively they need to acknowledge that they may end up killing the goose with the golden egg by being too financially demanding on hard pressed business owners.”

The comments come amidst continued pressure on the UK retail sector.

Almost 50 insolvencies took place in Scotland last year, with casual dining businesses also hit.

The downturn in profitability has seen several chains, including Italian food specialist Carluccio’s and children’s outfitter Mothercare, turn to company voluntary arrangements (CVAs) to close branches and reduce rents.

In recent reports, the British Property Federation (BPF) and insolvency trade body R3 have criticised this system and called for reform.

Demanding an “urgent review” and a new code of practice, the BPF suggested the agreements are being misused, while R3 found 65% of such rescue deals ended without fulfilling their stated purpose.

However, Blackburn defended CVAs as a form of “business rescue”, saying: “Many of the landlords believe that retailers are simply using CVAs as a quick and easy way to get out of their financial difficulties by holding their creditors to ransom, claiming the choice is between a CVA or insolvency.

“The reality is something in between.

“It should be remembered that a CVA is not a vehicle which should be used by all failing businesses but only by those with a chance of recovery who need a period to stabilise their finances.

“If a business is in terminal decline, then a CVA is not the answer as failure will occur even with the arrangement in place.

“A CVA is not a means to dodge the inevitable for a terminally ill business.”

She went on: “Although this may look as if CVAs fail two thirds of the time, when you look at the detail you find that even many of those which terminated without fulfilling their stated purpose still produced comparable or greater returns to creditors than if they had been put into administration or liquidation.”

On the ongoing High Street turmoil, she said: “There is little doubt that the High Street has been under severe strain in recent years and it is vital that we maintain a vibrant and strongly performing retail sector to maintain our economy.

“CVAs are a tool to assist in this but that one needs to be sharpened and honed so that it protects those businesses which most need it and maximises returns for creditors to ensure all of those involved come out of these difficult circumstances in as positive a way as possible.”