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Backing the BID

As retailers prepare to vote on the future of London’s business improvement district, has it convinced stores in the West End, and the rest of the UK, that it is a worthy investment?

Retail heavyweights including Marks & Spencer chief executive Stuart Rose and Arcadia owner Sir Philip Green turned out this week to support the launch of a business plan to develop London’s West End over the next five years.

The strategy has been developed by the New West End Company (NEWEC) as it attempts to convince retailers and landlords to vote to keep the company in operation for another five years.

NEWEC, one of the UK’s largest business improvement districts (BIDs), was set up in 2005 to improve the capital’s West End retail area. Like most of the UK’s BIDs, it is paid for by a levy from retailers and landlords, in this case 1% of the rateable value of a property.

This means the BID structure can be controversial. Retailers are already under pressure from rent and rate rises and higher utilities costs, and some have been sceptical about the benefits and are unhappy about paying an additional charge.

However, since it started NEWEC has introduced traffic-free days, including closing both Oxford Street and Regent Street to traffic on December 2 last year to boost Christmas trade. The area has also hosted festivals based on Spanish and country garden themes.

All the events saw thousands of shoppers line the streets of the West End to enjoy the entertainment and, crucially, to spend money. A team of Red Cap wardens has also been introduced to patrol the streets and help shoppers, with the scheme generating millions of pounds worth of publicity, according to NEWEC.

The BID is now approaching the end of its initial three-year period, and although a vote on its future will take place next month, the general consensus seems to be that it has been a success so far, albeit an expensive one.

One West End retailer typified the opinion of several retailers contacted by Drapers. “The New West End Company is doing a good job, but it is iniquitous that given the business rates we all pay, we have to pay a third party to do what the council should already be doing,” he says. “But we need something like the BID because the council isn’t providing the services, so we swallowed hard and paid the money.

“We are happy because it has worked and is reasonably good value for money, but ideally we should pay less in rates if we are paying the New West End Company,” he points out.

He adds that the BID arrangement would not necessarily be appropriate in other towns and cities across the UK. Areas including Liverpool, Leicester and Chester have already rejected BIDs in an initial ballot. “It’s a big city thing, and the problem is that the more places that do it, the greater the cost to the retailers that have more than a few stores,” the retailer says. “But at least if it doesn’t work you can vote against continuing it.”

Birmingham hosts one of the most recently founded BIDs, Retail Birmingham, covering High Street, New Street, Corporation Street, the Bullring, Mailbox, and Palisades shopping centres, and all the main retail areas in the city centre.

Shopping centre tenants do not pay the levy because most centres have their own charges for marketing, security and other services. However, centre owners make a contribution to the scheme because they are expected to benefit from improvements to the retail area in general.

The Birmingham BID has been up and running for just over two months of a five-year plan, which includes launching new marketing initiatives, street operations and retailer support. Retail Birmingham business manager Nigel Godfrey says he has been keeping a close eye on how NEWEC has fared.

“It is very well organised. Closing the roads is a fantastic idea, although it’s a very brave thing to do,” he says.

Although much of Birmingham’s retail area is already pedestrianised, Godfrey says he hopes for great things from the city’s BID, and dismisses the idea that retailers are effectively paying twice for the same service.

“You have to have a strong business community. BIDs are led by businesses and private companies, not the council. A BID gives a voice to those businesses that can speak direct to a local authority,” he says. “It attracts business groups that bring money to the table, and it gives power to retailers, including the independent retailers that can often feel left out.”

A website to support the Birmingham BID, at www.stylebirmingham.com, has already been launched and a retail directory for tourists is in the pipeline. Voting has just finished for the city’s Style Awards, where the public votes for its favourite retailers.

There is also a competition for independent retailers, which offers them the chance to win £5,000. Entrants must tell the story of their business, explain why they should win, and describe what they plan to do with the prize money, with the winner chosen by TV’s Queen of Shops Mary Portas.

Birmingham has clearly learnt a lot from NEWEC’s keen eye for a good marketing opportunity. But what’s next for the London BID? In November, retailers and landlords will vote on whether to keep the New West End Company for a further five years. Voting will start on November 21 for one month, with the result announced on December 21.

NEWEC acting chief executive Jace Tyrrell says that there is still a lot of work to do in terms of funding. “In the first three years, apart from the BID levy, we got £12 million funding from London mayor Ken Livingstone and property firms, along with £3m from commercial sponsors,” says Tyrrell. “The traffic-free day on Oxford Street and Regent Street brought in £6m of incremental sales.

“For the next term, traffic is the big issue. We want the West End to be dominated by people, not by transport. We are looking at ways to reduce congestion and have more traffic-free days, and plans for a tram in the area are already in place.

“The other target is the east end of Oxford Street, which needs to be brought up to standard in terms of the retail mix and the environment.”

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