Major Retailers Closing

vivatifosi

Thought I'd resurrect this thread to say that herbal medicine chain Dr China has been reported as the first of the failures relating to the quarterly retail rent payment that became due the end of March. It has entered administration and is closing 48 of its 86 stores.

Its taken me a couple of days to catch up with this story, so apologies that its a week old:

http://www.propertyweek.com/story.asp?sectioncode=36&storycode=3137598

Another interesting article from Property Week on the 10 tactics the big retailers are using to cut rents:

http://www.propertyweek.com/story.asp?sectioncode=38&storycode=3136109

fc123

Currys digital (used to be a Dixons) has gone from Brighton Shopping Centre.
H + M are moving into the old Woolworths building. Will they close their 2 existing stores in the shopping centre and re-locate both adults and kids to one building?

Envy (shopping centre again) closed.

All the above I was told as haven't walked past there for a while.

Fab article Viva....Seems old P Green is ahead of the pack as usual.

Andrew64

Apollo 2000 has been bought out of administration by another electrical chain, but looks like not all the shops or jobs will be saved.

http://www.berrowsjournal.co.uk/news/4282755.Electrical_store_saved_in_buy_out/

fc123

Sixty UK manage the Miss Sixty brand in the UK...not many shops but they are in good locations.
Carnaby St was still open and fully stocked the other day

Sixty UK rescued via CVA

3 April, 2009 | Updated: 6 April, 2009 11:18 am | By Marino Donati
Sixty UK, which trades the Miss Sixty and Energie stores and brands in the UK, has been rescued from administration via a Company Voluntary Agreement (CVA).



The CVA, which is due to be completed next month, will save around 250 jobs at Sixty UK. The company’s wholesale division will be unaffected by the deal. However its store in Manchester has already been closed and its store in Liverpool will also close shortly as a result of the CVA.

Administrators at Vantis Business Recovery Services said that creditors and shareholders had agreed on a new business model to allow the business to continue to trade profitably.

Administrator and CVA supervisor Peter Hollis said: “The CVA will enable all trade creditors to be paid in full immediately and landlords have separately agreed differing terms going forward, with all rents being brought up to date. The business will be handed back to the directors whilst I, as supervisor, will oversee that the terms of the CVA are adhered to.”

“This is a good news story on an otherwise gloomy high street. It is a triumph for sensible attitudes and strong, reasonable negotiations. Through proper dialogue with stakeholders and management, we have been able to develop a robust trading strategy, while Sixty UK operations continued uninterrupted.”

“It is my hope that this will prove a milestone in the processes used and outcomes achieved for the ailing retailing sector.”
Sixty UK went into administration last October. It had 12 stores and concessions.

fc123

Supply and demand affects prices....therefore 'values'.

http://www.drapersonline.com/news/multiples/analysis/retailers-see-bright-side-of-empty-shops/5001203.article

Even before the recession there were fears that the amount of new retail space in the pipeline - eight million sq ft opened last year - was excessive. That figure now seems relatively tame compared with the prospect of what could happen on the high street as the recession continues.
One retail agent, who is instructed by several high street chains, says: “There is a massive oversupply of space. If you add up the administrations and the prepacks, plus the fact that about 15% of last year’s new space is still available, and leases will be expiring that won’t be renewed, it means there is about 14 million sq ft on the market. And a lot of it is dilapidated.”

Closing down

Recent store closures:

• Barratts and Priceless 220
• Adams Kids 147
• Principles 85
• Original Shoe Company 64
• The Officers Club 32
• USC 15
• Qube 13

opaque

fc123 wrote: »

And a lot of it is dilapidated.

I think thats a very important point. Of course all the big shops will probably be ok, and new rental space won't have had the chance to get too knackered. But a lot of smaller shops, or shops that have been in the same space for over 20 years haven't had the refurbishments or upgrading beyond the legal minimum in some cases. So there might have been cosmetic changes but the electrics might need redoing, plumbing etc, all that stuff. with the rental market plummeting wheres the benefit in doing that now?
Surely that means that we might end up having bad quality shops empty for a long time until it becomes financially viable to do them up.

vivatifosi

Found another article on retail leases, this time by the chairman of House of Fraser. Key points:

* Retail rents are too high by 20-25%
* Even when firms go to landlords suggesting CVAs they get turned down.
* Pre-pack administration is the only way to make landlords sit up and listen.
* Big property companies are inflexible because they can't be seen as setting a precedent.
* Landlords are failing to see that in every town in the UK there is a new shopping centre open -called the internet - that they have no domain over.

See: http://www.propertyweek.com/story.asp?sectioncode=38&storycode=3138129

vivatifosi

Also in the news, Robert Dyas, the hardware chain with 99 UK stores has been saved from administration by an MBO. The price? £1 plus £30m of debt. See:

http://www.legalweek.com/Articles/1197810/BLP+and+Camerons+take+lead+roles+on+Robert+Dyas+MBO.html
and
http://www.diyweek.net/news/news.asp?id=12204&title=Robert+Dyas+buyout+completed

fc123

vivatifosi wrote: »

Found another article on retail leases, this time by the chairman of House of Fraser. Key points:

* Retail rents are too high by 20-25%
* Even when firms go to landlords suggesting CVAs they get turned down.
* Pre-pack administration is the only way to make landlords sit up and listen.
* Big property companies are inflexible because they can't be seen as setting a precedent.
* Landlords are failing to see that in every town in the UK there is a new shopping centre open -called the internet - that they have no domain over.

See: http://www.propertyweek.com/story.asp?sectioncode=38&storycode=3138129

Thanks for the link to this mag..I have never read it before.
Eric Musgrave is a well respected writer within our industry...Drapers is dreadful now....he used to edit it years ago.

I am back on ID for the time being....;)

vivatifosi

Hi fc123, there are two main mags for commercial property (as opposed to construction), Property Week and Estates Gazette. Unfortunately you have to pay to read EGi's online service, but it is excellent. Property Week is well worth keeping an eye to for stories about the major retailers, particularly in these times where the market is at a tipping point.