With recent upstarts challenging its historic luxury cachet, Bond Street businesses must work together to retain its prestige.
Not so long ago, Bond Street stood head and shoulders above any other UK luxury retail location as the must-visit destination for affluent shoppers.
Now, however, it is not so cut and dried. Sloane Street markets itself as London’s premier luxury thoroughfare. Covent Garden now targets the wealthy shopper, as do Regent Street and Westfield London’s Village area. The advantage these have over Bond Street is that they are all largely in single ownership - to the Cadogan Estate, Capco, the Crown Estate and Westfield respectively. This allows full control over the environment, mix and in implementing a vision.
While Bond Street has a five-year strategy to better manage the environment which is coming together under the New West End Company, a Business Improvement District that also covers the Oxford Street and Regent Street areas, can it compete with the joined-up approach of its rivals?
“A single landlord has better control over who their tenants are, the lease terms and who they sub-let their units to and can manage individual assets for the benefit of the ‘estate’. Multiple ownership has lots of competing agendas. If an owner, for example, has a pressing debt issue, they will not care if an occupier brings down the tone of the tenant profile, but may choose the highest rent over a stronger retailer,” explains Phil Cann, head of UK retail for property consultant CBRE.
However, it would be foolish to suggest that Bond Street is anything other than one of the strongest luxury brand locations in the world. Cann says there are between 30 and 40 retailers queuing to get onto the street, so clearly demand has not declined.
In addition, CBRE estimates the street will see 5% to 6% rental growth per year in the near future, demonstrating the premium retailers are prepared to pay for a Bond Street address. But Bond Street cannot afford to be complacent.
Lord Bruce Dundas, chairman of retail trade organisation the Bond Street Association, says: “We might not always be the premier shopping street. Bond Street needs money put back into it or in 10 years’ time it might be overtaken.”
The competition it faces will only increase. On top of the Crown Estate’s transformation of Regent Street into a luxury destination and Capco’s similar vision for Covent Garden, a group of Italian investors are consolidating ownership on Albemarle Street, adjacent to Bond Street. They intend to attract lavish store concepts and have already driven rents up by 25%.
Membership of the NWEC is mandatory for businesses occupying properties with a ratable value of £250,000 or greater, who pay a 1% levy. Smaller companies and those in feeder streets can become voluntary members.
The Bond Street Development Group is a subsection of NWEC that has control over the public realm, which does not include buildings and tenants.
Managing director Beverley Aspinall, who previously held the same role at department store Fortnum & Mason, says: “There was a feeling that in probably the world’s most famous luxury retail street, the public realm was not as good as you might expect. Our members are very keen to change that.”
She goes as far as to say that all the streetscape between Bond Street’s buildings will be reconsidered. This means improving the street furniture, employing higher-quality finishes for the road surfaces, as well as addressing the narrow pavements, a perennial gripe among retailers. It is undertaking traffic modelling to address the disadvantage the one-way system gives the northern part of the street, and is looking at parking, disruption caused by delivery lorries, lighting, signage and the creation of “Oasis” leisure spaces for shoppers to relax in.
Aspinall adds: “There is no getting away from the fact that it is much more difficult dealing with 130 retailers, 100 owners and more than 300 stakeholders. It involves communicating through conferences, seminars and one-to-ones. But, by and large, people are of the mindset that we have to work together to achieve something that we cannot do individually.” She disputes the notion that Bond Street’s fragmented nature makes achieving NWEC’s business plan impossible, because its retailers have shared objectives.
“Where single ownership does not exist, I would rather have the consolation prize of a BID than nothing at all,” says the British Council of Shopping Centre’s director of policy and public affairs Ed Cooke. “They have money, they are business-led and they are democratic.”
Where NWEC’s influence is limited, it can work in collaboration with councils, who can wield compulsory purchase order powers in extremis. “I think there are instances where CPOs could be used more frequently and effectively. But it’s not necessarily a silver bullet and there are risks associated with it,” says Cooke.
In 2013, NWEC generated more than £4.2m from the levy and voluntary contributions across the whole of its West End remit. It is estimated that around £850,000 of that came from Bond Street retailers. Lord Dundas says: “I have a great deal of respect for Beverley [Aspinall] but I would like to see some of that money spent on Bond Street. There is a little too much talking and I would like to get on with it.
“A plan needs to be put forward, with proper costings and permissions from Westminster council and Transport for London. We could then say to landlords: ‘This is what we need to do and this is how much it will cost’.” He believes more should be done in advance of Crossrail’s completion in 2018. A report from consultancy Arup says by 2026, Crossrail will lead to a 40% rise in visitor numbers to Bond Street station.
Lord Dundas would like to see art installations, as high net-worth art lovers are already attracted to the street’s galleries and antique shops. He would also like the road to be closed to traffic during certain times of day. “If you could get one or two major landlords together in a room, you would move things on immeasurably. But that would take money and that is where I come back to the BID,” he adds.
Retail areas in single ownership can reconfigure whole aspects of the streetscape to increase its attractiveness. Michael Wainwright, managing director of jeweller Boodles, a Bond Street tenant, says: “Window frontage is very helpful - a wider, shallower shop would suit our business better but you don’t get that in Bond Street. However, the location is so amazing that the address overrides everything else.”
The shops have different opening hours, usually closing at 6pm. Some open Sundays, others do not. CBRE’s Cann says: “Bond Street is competing with Harrods and Selfridges. They are seven-day emporiums, open until 8pm and 10pm. A consensus as to opening hours is an easy win that will drive more trade in the location.”
Refuse collection needs to be better co-ordinated to minimise disruption. The buildings could be better lit and even the hoardings [on empty buildings and those undergoing refurbishment] could be improved and standardised. Lord Dundas feels Bond Street should be more involved in British Fashion Week to consolidate its reputation.
BCSC’s Cooke highlights the potential for a poor tenant mix in streets with fragmented ownership: “Where lots of property owners choose similar types of retailers, you might get an overly concentrated make-up.” He points to the abundance of estate agents on Upper Street in Islington as an example.
The majority of landlords can be responsible, but it only takes a couple to have a negative impact. Some have questioned the suitability of lingerie retailer Victoria’s Secret’s arrival on New Bond Street, given the complexion of its neighbours such as Fenwick.
There are natural clusters on the street, however. No purely fashion retailers have chosen to be in the jewellery section south of Clifford Street, while art and antique shops tend to be located between Maddox Street and Bruton Street.
But there is no escaping that there is little NWEC can do if a genuine misfit were to appear. Aspinall acknowledges it cannot dictate to landlords on this issue, but says: “We can work to protect what is already there and look to influence agendas, for example when two retailers are prepared to pay the same rent.”
Bond Street is still one of Europe’s leading retail destinations - now it needs to address its complexities to ensure it remains ahead of its rivals.
Bond Street Key Facts:
● Total retail spend in Bond Street is currently £1bn a year
● Chinese visitors are the highest spenders
● Chinese visitors spend in excess of £1,200 per transaction
● The domestic shopper market accounts for 48% of total spend
● 52.1% of shoppers are international
● Domestic shoppers spend in excess of £990 per transaction
● One domestic shopper spent £62,000 in one morning
Source: New West End Company