Dickens & Jones of Regent Street plans to close in January 2006 after 150 years of trading. The department store, which is virtually a part of London’s heritage has blamed rising rents as the reason for closure.
The rents have increased significantly over the last two years and it has now become impossible for the store to maintain profitability. The House of Fraser group has stores in Oxford Street, Kensington and Victoria and has opened a number of new stores in the south-east.
As rents increase in London, the south-east presents an increasingly attractive proposition for retailers looking to relocate. Brighton could stand to gain as it offers a lively and appealing marketplace for many West End retailers although it still suffers from a shortage of the large floorplate units that the big names prefer.
While this could be attractive in terms of raising the city’s profile there is a danger that London retailers will agree to pay higher rents than the 'going rate' and so raise the rental tone. This could lead to many independents selling out and Brighton losing its identity as a interesting and different place to shop.
BUSINESS FORUM COMMENT
It is important for the prosperity of the whole city that we maintain the independent retail sector. And it is important that all independent retailers join their local traders association to ensure that they play their part in lobbying to protect their interests.
As trading conditions hardens and retail turnover continues to decline it is vital that any shops that have a rent review in the next 12 months get professional representation. The only silver lining to the black cloud hanging over the high street is that the consumer downturn may hold back or even reverse some of the unsustainable rent rises that we have seen in the last five years.
This is what happened during the recession of the early 1990s. Landlords declined to accommodate requests for lower rents from their tenants who went out of business leaving shops empty. For a few months the landlords continued to market the properties at the same rent but started to drop their asking price after properties were vacant for up to a year.
A lot of retailers managed to negotiate private deals with their landlords to reduce the rent payable although the headline rent remained the same. This at least kept them in business during the harsh years of the recession.
For information about retail associations click on ‘Partners’ above.
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