Failing retailers

vivatifosi

Shoe firm goes under

THE owner of High Street shoe traders Barratts and Priceless has gone into administration putting thousands of employees’ jobs at risk.
The Barratts Priceless Group, based in Bradford, employs 3,840 staff across hundreds of outlets in the UK.


http://www.yorkshireeveningpost.co.uk/news/business-news/business-headlines/shoe_firm_goes_under_1_4046993




Given concerns about Blacks that have already been expressed on this board, maybe its time to start a generalist retail watch thread again, like the one we had when all those firms failed in the run up to a quarter day.

Thrugelmir

Too many large retailers selling the same/similar products in the High Street.

Though the cost of running a commercial premises is so high in this country. Making a reasonable return must be hard work. Another sign of how unbalanced the UK economy has become.

vivatifosi

Thrugelmir wrote: »

Though the cost of running a commercial premises is so high in this country. Making a reasonable return must be hard work. Another sign of how unbalanced the UK economy has become.

Not just the cost, but the inflexibility of the terms. Retail property portfolio holders need to wake up to the new realities of their tenants.

Even my hairdresser has been complaining that his rent has been put up. The economy is bumping along the bottom, discretionary spend is down, there are always empty units coming up because businesses fold quickly. We're talking marginal retail space, not grade A. And who's the baddie landlord doing this? The local council. Long upward only and FRI leases have a lot to answer for.

michaels

Isn't it more syptoms of the over-leveraged economy - a lot of the weakest retailers are the product of 'optomistic' mbos backed by VC but at the same time the property cos are equally heavily leveraged so can not afford lower rents - add in the disruption caused by the popularity of internet shopping and the retail shake out will contnue. Of course behind all these companies at the end of the chain sit the banks...

HAMISH_MCTAVISH

For the first time this year, I've completed all my Xmas shopping online. And thinking about it, this year around 70% of the money I've spent purchasing stuff has been online....

I don't think we can underestimate the massive change that's happening in the way people buy things nowadays.... An awful lot of money is being taken out of spending in high street shops and going online instead. Inevitable that more will close in coming years I suspect, and that the amount of retail space will shrink.

chucknorris

HAMISH_MCTAVISH wrote: »

For the first time this year, I've completed all my Xmas shopping online. And thinking about it, this year around 70% of the money I've spent purchasing stuff has been online....

I don't think we can underestimate the massive change that's happening in the way people buy things nowadays.... An awful lot of money is being taken out of spending in high street shops and going online instead. Inevitable that more will close in coming years I suspect, and that the amount of retail space will shrink.

I think footwear is probably something that wouldn't tend to bought online (unless you know exactly what you are buying of course, like the particular trainers that I always run in for example).

But it's an interesting point and one that has been lurking in my thoughts as a negative about eventually moving into commercial property.

vivatifosi

chucknorris wrote: »

But it's an interesting point and one that has been lurking in my thoughts as a negative about eventually moving into commercial property.

Don't forget though that retail is only part of the commercial property conundrum. For example, closed stores lead to a greater need to a warehouse presence for online retailers.

HAMISH_MCTAVISH

There will always be a place for some types of retailer on the high street, not everything is suitable to being sold through an online business model, but I wouldn't be surprised if there were half the number of shops around in 10 years that there are today.

vivatifosi

HAMISH_MCTAVISH wrote: »

There will always be a place for some types of retailer on the high street, not everything is suitable to being sold through an online business model, but I wouldn't be surprised if there were half the number of shops around in 10 years that there are today.

It would be good if smaller retailers had the opportunity to try the market in a local setting and without the ridiculous set up costs. That would help breathe new life into the sector which clearly will morph into online moving forward.

There is however an issue with over-zealous landlords pushing up rents at all costs (fc has also written about it). I don't see the point of this when you end up with a void that takes ages to fill. A 'shared pain' scenario with flat or slightly lower rentals could keep tenants in situ and reduce the number of failed companies and pull-outs. Though clearly bad companies will still fail.

MacMickster

The problem that I see is that shoppers (such as Mrs MacMickster) like to choose products by actually seeing them in stores, and asking for information from a salesman. Once she has chosen the product that she wants, she walks out of the shop and buys it cheaper online from a seller who does not have the overheads of the high street retailer. She doesn't see that eventually there will not be stores with the products or salesmen to help her to make her choice.

vivatifosi

MacMickster wrote: »

The problem that I see is that shoppers (such as Mrs MacMickster) like to choose products by actually seeing them in stores, and asking for information from a salesman. Once she has chosen the product that she wants, she walks out of the shop and buys it cheaper online from a seller who does not have the overheads of the high street retailer. She doesn't see that eventually there will not be stores with the products or salesmen to help her to make her choice.

That's an important point. Personally I don't like buying clothes online but will buy pretty much anything else. I tend to use testimonials on sites like Amazon and customer-centric resources like Which? magazine. One thing I hate about internet retail though is being asked to rate my "customer experience" (yawn). At least when I go into a store I don't get someone grabbing me on the way out and asking if I was happy with service.