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G-Star franchise store closures blamed on rents

At least six G-Star franchise stores have closed - most over the past two weeks - with high rents thought to be the primary factor.

Stores at Gateshead MetroCentre, Intu in Derby, St David’s Way in Cardiff, Highcross Lane in Leicester, Carnaby Street in london and Cabot Circus in Bristol have all closed over the last fortnight. The Carnaby Street in London has also closed. All were operated by Denim Retail, owned by Carl Peddie who also owns independent retailer Diffusion.

One source said the Bristol store closed on September 18 as the franchise owner “just couldn’t afford the rent”.

Another source told Drapers: “There just isn’t enough of a margin in a franchise store to keep up with the massive rents they are being charged. They were struggling to make things work. It is difficult for a mono-brand store like G-Star to survive as it is often being heavily discounted in other outlets like Bank, USC and House of Fraser in the same town.”

G-Star UK country manager Nathan Ness confirmed a number of stores had closed, but declined to outline how many have shut and how many are still operating. He also declined to confirm the total number of franchise stores still operating in the UK.

He told Drapers: “Yes we have closed stores. Obviously there are ever-changing dynamics within the UK retail environment. As a business we are focused on operating strong, profitable stores and in the future we continue to assess the right location for the brand.”

Carl Peddie, owner of denim retail and Diffusion said: “We are totally aligned with G Star’s strategy for the UK.”

Diffusion still operates four G-Star franchise stores, in London’s Covent Garden and Oxford Street, Birmingham Bullring and Manchester Arndale Centre. Xile in Edinburgh operates three stores - two in Glasgow and one in the Scottish capital.

Diffusion has five of its own premium stores in Wolverhampton, Merry Hill in Dudley, Telford, Walsall and Derby, plus a Twenty9 store in Merry Hill, which has more of a luxury offer.

Readers' comments (4)

  • Thierry BAYLE

    It is always sad to see stores closing.
    Retail is detail so the closure must be the combination of several issues: people, stock, marketing, traffic...

    However, lately I feel there is little time dedicated to understanding and managing cash flow through stock. Especially with independent boutiques the first asset on which we spend money on is the stock and yet we do not have a proper classification structure, we do not have an accurate sales forecasting per class and the sales to stock ratio in each class to feed the right level of stock. The open to buy plan is one solution to drive a better retail business.
    When I look at the stock level in many companies, we are close to 5/6 months of sales.

    10 days ago, Westfield had 30 empty units.

    Why is it happening?
    Let's drill down all the reasons and let's work hard on fixing the issues.

    Thierry Bayle

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  • Nothing to do with G Star being yesterday's
    Brand then ? If you look properly lots of mono
    Brands have quietly closed over the last 3 years , outside of
    London it's difficult

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  • Thierry BAYLE

    We agree that it was not related to G-Star specifically.
    However I feel that we need to address one of the area of retail which Retailers are not tackling with enough depth: stock.
    Having the right product at the right time in the right quantity is not an issue thing.
    Would like all retailers' feedback on that? How they tackle it? What KPIs they track? ...
    Thierry Bayle

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  • Or why are brands obsessed with primary sites that can never be viable?

    Discuss.

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