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British Store Rents Are High. Retail Retailers Rather Than Renewals.

2011/5/23 13:10:00 92

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British Store Rents Apparel Retailing To Cut Costs

Many British retailers will face the pressure of ending some stores in the next 2 to 3 years, and this will depend on whether there is a positive outcome between consultations between owners and landlords.

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British Retail Industry

The increasingly serious trade situation is mainly due to the reduction of consumer spending. This situation is directly reflected in the sales performance of the retail industry. Under the pressure of reducing costs, retailers have publicly condemned the inflexibility of the British shop rental contracts. The market price of rental rents in some areas has dropped by half in the past three years, but many British retailers have also carried out the rental contracts that are equivalent to the glory period.

The Arcadia group, which owns TopShop, DorothyPerkins and other famous clothing brands, has about 500 retail stores which will be sold out in the next three years. Therefore, it is now consulting with the landlord, hoping to reduce store rentals. If the negotiations break down, the 500 stores are expected to face about 2/3 of the closing difficulties.

British women and children's brand Mothercare also has the same situation. About 1/3 of the shops in the UK (120 branches) will be sold out, many of which are in 1980s.

House prices are soaring.

Most of the tenancies were signed at the shopping center in the city, and the expensive lease expires in 25 years.

Many other retail businesses are also facing such a situation. According to the ColliersInternational of real estate consultancy, between 1998 and 2008, the retail store rental in the UK grew by 40%, while in the same period, the rental of 18 shopping centers doubled in Britain, including CentralLondondistricts, Southampton, Redhill, Newquay and Nuneaton.

KateCalvert, a retail analyst, believes that the vast majority of retailers in the UK fail to achieve their desired level of performance and therefore reduce costs.

Cost reduction

The final method is to end the tenancy agreement. The main retail business area rents are still high. However, many of the worse locations still have many idle shops to rent. Therefore, retailers who are about to expire in their hands are still fighting with the landlord, pressing the landlord for more rent discount.