Amid all the CVAs, there are still plenty of retailers opening bricks-and-mortar stores

As ever, it’s not all bad news in bricks-and-mortar retail – and one retailer’s doom is often another’s opportunity to open new stores.

It’s fair to say that the last couple of months have delivered doom-laden retail headlines of a kind that we probably haven’t seen since the collapse of Woolworths (among other big names) back in 2008.

April alone saw Select and Carpetright get their proposals for company voluntary arrangments (CVAs) through, following the approval in March of New Look’s own plans to close stores and cut rents.

Meanwhile, Poundworld, Mothercare and The Original Factory Shop (TOFS) have all recently been reported to be pursuing a similar approach, while these retailers were joined, last week, by perhaps the most significant big name yet, House of Fraser, which is expected to launch a CVA in June.

East store in Durham closing down (27 Mar 2018). Photograph by Graham Soult
East store in Durham closing down (27 Mar 2018). Photograph by Graham Soult

Add in April’s final disappearance of Toys R Us from the UK, confirmation of the closure of fashion chain East, and, following January’s announcement, a flurry of M&S closures in locations such as Durham, Bridlington and Bournemouth, and it’s clear that there is a great deal of change going on in physical retail.

Why are physical retailers struggling?

For the most part, retailers that are struggling tend to be those that are simply not as good as their competitors – the New Looks compared to the Primarks, or the Poundworlds compared to the Poundlands.

After all, it’s no coincidence that bricks-and-mortar toy chains The Entertainer and Smyths continue to thrive and expand, even as Toys R Us has vanished, partly due to them having a better offer, better value, better locations, and better customer experience.

In toy retailing, as in other parts of retail, it’s clearly simplistic to suggest that online shopping is the cause of all woes.

Indeed, what’s happening now is that weak retailers – or even vaguely healthy ones – are being exposed not just by the impact of online competition, but by a flurry of other factors that are making it harder for them to trade profitably.

These factors include the weak pound increasing the cost of imported products and raw materials; the National Living Wage, among other things, making it more expensive to employ staff; stonking business rate rises in the most vibrant locations; and, on top of all that, consumers who are stubbornly holding back on their spending.

Against this backdrop, it’s hardly a surprise that retailers are raising the white flag.

But one retailer’s doom is another’s opportunity

As ever, though, it’s not all bad news. Indeed, you’ll know that I’m like a stuck record in arguing that physical retail still has a future.

Well-run, quality independents will play a pivotal role in fashioning the distinctive, joyful places of the future.

Graham Soult

Just in April, for example, discounters Aldi and Lidl continued their assault on the UK with a raft of new openings and plans for further UK stores, while in out-of-town retail, space freed up by B&Q and Homebase closures is facilitating new developments in locations such as Colchester (Lidl) and Craigavon (M&S).

Interestingly, the expansion of furniture and homewares chain Homesense – sister brand of TK Maxx – also looks to have gone up a gear, with plans announced for new stores inside existing TK Maxx shops in Bolton, Shrewsbury, Thanet and Weston-super-Mare.

On the high street, April also saw the usual clutch of interesting new independents, such as Willowtree, a convenience-focused butcher in Long Eaton, and Ingmans, a fashion store combined with a cobbler, in Chesterfield.

That’s another of my mantras – supporting and championing “marketing-savvy independent retailers”, and recognising the pivotal role that well-run, quality independents will play in fashioning the distinctive, joyful places of the future.

Grimsby BHS shortly before closure (22 Jun 2016). Photograph by Graham Soult
Grimsby BHS shortly before closure (22 Jun 2016). Photograph by Graham Soult

Just as vacant DIY sheds create opportunities for other businesses, the demise of BHS is continuing to have an impact too.

Several more ex-BHS stores were finally reoccupied in April, from Poundland and Pep&Co taking the sites in Grimsby and Ashford, to H&M opening in part of the Burton-upon-Trent branch.

There has even been new investment in the high street from retailers that have previously tended to target out of town, including an unusual high-street Oak Furniture Land in Bath (in an ex-Multiyork), and a couple of new town-centre Poundstretchers in Market Deeping and Great Yarmouth – the latter yet another former BHS.

New arrival HOUSE plotting 75 UK stores

It’s always particularly interesting when you get totally new entrants to the UK market, and April saw Australian homewares retailer HOUSE open its first British shops – with plans to add many more in the coming months.

HOUSE opened its first UK store at Westgate Oxford followed by two more at The Lexicon in Bracknell and Meadowhall in Sheffield. A UK transactional website also launched at the same time.

HOUSE’s strategy appears to be to target modern shopping centres in strong locations, with Chapelfield in Norwich and Cribbs Causeway in Bristol next on the store-opening calendar. Ultimately, the retailer is expecting to grow to 75 stores in Britain.

HOUSE is just the latest Australian retailer to make a push in the UK, following the recent arrival of businesses such as Smiggle and Lovisa. Aussie brands have a mixed record of success over here – while stationer Smiggle has grown to 120 UK shops (and rising), plus-size fashion chain Taking Shape appointed liquidators for its UK operation in 2016.

Most notably, of course, the jury is still out on whether Bunnings can yet turn around its botched purchase of Homebase, having made the error of not sufficiently adapting its Australian offer for the UK market.

For now, perhaps the biggest challenge HOUSE faces is dealing with its eminently un-Googleable name.

As you’d expect, searching “House Oxford”, “House Bracknell” or “House Sheffield” brings up a multitude of entirely irrelevant results, though the paid links to the appropriate page of the HOUSE website that show up when you search for any of these terms suggest that the retailer has already recognised the issue.

Among the retailers that are virtually impossible to search for, let’s just hope that HOUSE becomes as much of a fixture in UK retail centres as Next – rather than going the way of East.

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