The news this week that Asos has bought Topshop, Topman and Miss Selfridge from the failed Arcadia group is the latest evidence of the rapidly increasing dominance of younger online retailers over the traditional bricks-and-mortar fashion stores.
The deal comes hot on the heels of Boohoo agreeing to pay £55m for the Debenhams brand last week. And we won’t have seen the end of the Arcadia fire sale either: stalwarts like Dorothy Perkins, Wallis and Burton still awaiting bidders.
But while such deals may save these familiar brands from disappearing altogether, it means there will be a more visible impact on suburban London High Streets: neither Asos or Boohoo are keeping any of these stores open – and it’s hard to imagine that the buyers of the remaining brands will do so either.
Bricks and mortar retail was in trouble before Covid of course, but extended lockdowns have accelerated the demise of the physical store. However, the disappearance of giants like the Arcadia brands from London’s boroughs marks a new low.
Such marquee names were trumpeted by councils as star attractions; smaller stores were willing to pay higher rents and business rates because they knew that they could ride on the coattails of shoppers drawn into town by these giants. It meant less well-known retailers and independents could co-exist alongside household names, creating diverse local shopping locations.
What’s needed is a ‘three Rs’ strategy to regenerate our High Streets.
Central government needs to start supporting local businesses through the likes of interest-free loans while the impact of Covid persists. Or as Mary Portas, the former government ‘High St tsar’ has suggested, business rates relief could be extended until the end of the year and an Eat Out to Help Out-style incentive scheme could be introduced to encourage shoppers back into town centres.
I suggest that given there’s still a gulf in the tax that online retailers pay compared to the sums that bricks and mortar retailers shell out in business rates, levelling this playing field would give the government plenty of money to support the retail property sector. The Chancellor’s Budget, on March 3, is an opportunity to do this.
Local innovation strategies – bringing together community leaders, retailers, local government and other stakeholders – need to be drawn up with the current retail crisis and the impact of Covid as key drivers.
In Poole, Dorset, for example, the local authority is offering rent-free premises for two years in the town centre, with business rates also being covered. The scheme has already attracted the likes of a zero-waste grocers, an independent fishmonger, an art gallery and a coffee shop. There’s no reason why London boroughs couldn’t do similar.
Rethinking should go beyond the obvious. Many recent retail rethinks, for example, haven’t gone much beyond introducing crazy golf, escape rooms, cafes or street food outlets. Rethinks should consider where there are gaps and look at the experiential – is there an untapped potential for greater tourism or visitor experiences for example?
At McBains, we’re working with a number of local authorities who are exploring what can be done to draw out the best bits of ‘local’ with the most exciting elements of ‘experiential’ to create a climate suitable for sustainable growth.
As Melanie Leech, chief executive of the British Property Federation, says: “You need the local authority to have an idea of what they want their area to be. There’s no point turning an empty shop into an empty office if no one wants to come into the town centre. You have to step back and say ‘what’s the vision for this place, and what do we need to get there?’”
Following a ‘three Rs’ approach can help crystallise that thinking.