Your browser is no longer supported. For the best experience of this website, please upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

Editor's Comment: High street needs government help, not CVAs

Keely Stocker

Save the high street! It’s a cry we have heard for many years that continues as many big high street names struggle.

In the last two months, company voluntary arrangements (CVAs) from House of Fraser and New Look have been planned. And just this week, Mothercare entered its own CVA proceedings. Reader comments on drapersonline.com highlight that many do not feel that a CVA deals with fundamental issues businesses face.

Mothercare

Mothercare is the latest high street name to announce a CVA

The success rate of CVAs is poor and they often do not achieve what they set out to do, as Drapers highlighted last month, in a piece asking if the high street would suffer a CVA domino effect in 2018.

Jonathan De Mello, head of retail consultancy at property agency Harper Dennis Hobbs, said at the time: “Of 22 major CVAs we looked at between 2008 and 2016, 11 are still operating stores to some degree.” Roughly half of CVAs end up with the applicant going into administration, so changes must be made.

Rather than a continuing down the CVA route, which often only provides short-term relief for businesses destined to fail, now is the time for the government to step in and provide support for the UK retail sector: freeze business rates, intervene on increasing rents and support councils to better plan town centres for future communities that need a mix of residential, retail and leisure to drive local economies.

As I’ve said before in this column, the high street is not dead. Consumers still want to shop, but the landscape is rapidly changing and retailers need government support to adapt for the future, become more agile and evolve.

Last week, I was part of the judging panel for the Future Retail Destinations competition, run by Drapers’ sister title, The Architects’ Journal, and The Crown Estate. Architects were asked to re-imagine regional retail parks for the year 2030 and beyond. The diverse range of concepts highlighted one thing in particular: retailers must change now to ensure they are part of the future.

Drapers wants to hear how you think the government can support the UK fashion industry. Email me at keely.stocker@emap.com and share your thoughts.

Readers' comments (2)

  • I totally disagree. Last time I heard we live in a free market economy. If new technology comes along that makes the existing way of doing things untenable, then the existing way of doing things needs to change. The fact is that inflexible lease contracts no longer reflect the value of a property in the new paradigm. Landlords of course want to live in the past, but they need to take the hit and accept that the physical store is getting a smaller share of wallet, hence the value of the physical store has fallen. Taxpayers money should not be spent rescuing private investors. Where the government could change policy is in scrapping the business rates system and introducing a sales tax, regardless of whether sales are made online or offline. The playing field needs to be levelled.

    Unsuitable or offensive? Report this comment

  • Even if the Government implemented the things mentioned in this article, it wouldn't make any real difference. Badly run businesses would still be badly run businesses. Governments cannot change that.

    CVA's aren't the solution, they just delay the inevitable in many cases. Unprofitable businesses should be allowed to go bust and I don't understand the support they get from the media, because after all, they are failures.

    Unsuitable or offensive? Report this comment

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.