Could it be that the balance of power on the UK’s high streets is shifting?
Drapers got a sneak preview of the latest figures on retail closures for the first part of 2012 this week, and it shows that the policy among many of the big fashion retailers to divest themselves of underperforming high street sites has begun to really kick in.
In fact, 265 branches of fashion multiples closed in the first six months of this year according to the report from research firm Local Data Company, which, taking into account any openings over the same period, equates to a net 3.6% decline in the number of sites on the UK’s high streets.
This is a sign of the times for sure, but most interestingly if we compare these figures to those within the indie market, we can see that in fact indies seem to have fared better over the same period as a result of a much larger number of openings, with net closures totalling 35, equating to a drop of 0.43%.
It seems likely that this shift will continue as the leases come up for renewal on sites across the UK and large retailers are able to pull out of areas they no longer consider viable, and indeed if Drapers was to do a bit of future gazing, a decade from now most fashion chains will almost certainly have reeled back their estates to consist only of selected key strategic sites, coupled where appropriate with a highly efficient online business.
There will be hubs such as the Westfield sites where all the major retailers are represented, but in secondary town centres, for example, it’s likely that the proportion of multiples to indies will have changed. The challenge then, of course, being to make sure consumers don’t abandon the high street altogether for out-of-town shopping, and that the rents are not set so high that they price indies out of the market.
It would also be very interesting to take a closer look at the indies that have opened. Long gone are the days when someone would enter the indie market as a hobby, and I suspect some of the closures in that sector are the last wave of such ill-thought-out ventures. Nowadays you’ve got to be sharp and focused to make an indie business work, but those who do are now in a good position to expand and I suspect a chunk of those openings are sites being added to the portfolios of the larger indie chains.
Either way, the report suggests that the climate is favourable for a move to a more varied high street mix, something consumer groups and industry watchers have suggested is key to rejuvenating some of the ailing regional retail centres. Of course, a bit of government support wouldn’t go amiss either…