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Weak locations 'could hamper deals to sell Store Twenty One sites'

A number of factors  are combining to make Store Twenty One sites less-than-attractive to potential buyers, according to research by analysts the Local Data Company (LDC).

The report gives 204 of the store’s 221 retail sites a Health Index rating out of 10. This is based on a number of factors, including local competition and other amenities, that are likely to influence footfall, dwell time and general retail performance.

Only eight Store Twenty One sites have a score of six or above, with four out of 10 (56 stores) being the most common rating. The national average in comparative research is six out of 10. Below, we explore some of the reasons for the weak ratings.

store twenty one health index

store twenty one health index

Competition

In many Store Twenty One locations there is little competition in the immediate vicinity. In total 70 stores (32%)  have no direct competitor within a 2km (1.25 mile) radius, according to the LDC. Only five sites (2%) are in direct competition with five separate retailers across the same geographical area.

But although seemingly a good thing, lack of competition may actually be the opposite, according to LDC director Matthew Hopkinson.

store 21 comp

store 21 comp

Number of competitors within 2km of each Store Twenty One site

“Fashion retail is particularly reliant on the proximity of stores to each other, so people want to go to areas where they can browse a few places before making a purchase,” he said. “Being out on your own away from your competitors is not by always an advantage by any means.”

The other problem for Store Twenty One is that, where is does face competition, it’s often in the form of retailers that squeeze its bottom end. Primark, Peacocks and supermarket brands such as F&F and George are some of the biggest challengers, according to the research. And Hopkinson sees this as a big problem.

“The value market is pretty saturated as it is,” he warned. “And many of Store Twenty One’s sites are in towns with quite a low average income, so this may cause them issues.”

High-street woes

Store Twenty One still has 130 of its sites (59%) on the high street. A long-term drain of shoppers away from traditional town centres, due first to shopping centres, retail parks and latterly online shopping, will make these sites even less attractive buyers, according to Hopkinson.

“All physical sites are in decline and fashion is feeling the pressure more than most,” he said. “And you just have to look at Asos, for example, to see that online sales are taking even more business away.”

Ray of hope

But it’s not all doom and gloom. Hopkinson believes there are “about 25” sites that might be attractive to potential buyers.

“They are few and far between but they are there,” he confirmed. “The million dollar question, which I don’t know the answer to, is how many are currently profitable? That will be a huge question that any potential buyer will want answered.”

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