Cooke & Arkwright
News
High street hunch
09/06/09
Is the time ripe for entrepreneurs to take on the high street?
The “credit crunch” and its ongoing effects have all been well documented. Nowhere has the destructive nature of reduced credit in our debt dependent nation been more evident than in the high streets across the country. But empty shops left by the recession and increasingly attractive terms offered by landlords, provide opportunities for entrepreneurs to create new businesses with a prime high street presence.
Over the past twelve months long established big name retailers such as Woolworths, Envy, Faith, MFI, Mosaic (brands - Warehouse, Oasis, Coast, Karen Millen, Anoushka G, Principles and The Shoe Studio), Zavvi and Rosebys to name a few, have succumbed. While many landlords have been willing through necessity to be flexible and take the current climate into account, the threat of pre-pack administration in some instances has forced landlords to lower rents or offer more flexible lease terms. Pre-pack administration is used where a distressed company seeks a buyer before the business officially goes into administration, often without the knowledge of its creditors. This can result in creditors losing out on any money owed.
William Lloyd Davies of Cooke & Arkwright Chartered Surveyors’ Retail Department says that there is now a wider range of empty retail units on the high street than at any time in the last 20 years. “One of best indications that times are tough has been demonstrated by Poundland acquiring a prime site in Queen Street, Cardiff. The popularity of the store is without question, but it provides clear evidence of the changing face of the high street when a store whose business it is to sell everything for a pound occupies such a strong position in one of Cardiff’s premier shopping streets.”
This is not necessarily a bad thing. “Throughout the Principality, huge gaps left in towns’ high streets following the demise of Woolworths are slowly being brought back to life by a number of new occupiers such as Home Bargains, B & M stores, Iceland and The Original Factory Shop,” says Mr Lloyd Davies. “And we must balance this with the fact that St David’s 2 Shopping Centre in Cardiff has attracted new fashion and leisure operators not previously represented in any Welsh towns. Those signed up include Reiss, Crew, Hugo Boss, Kurt Geiger and Jamie’s Italian.”
But more importantly, according to Mr Lloyd Davies, there are real bargains for those wishing to lease property on the high street. “There is oversupply and landlords are employing a variety of incentives to attract and secure occupiers. These factors mean that now is a better time than ever before for a new generation of entrepreneurs to acquire a prime high street presence.”
Some economists point out that nearly all previous recessions have produced more entrepreneurs than at any other time. This is due to the fact that commodities, property and labour are cheap, and partly because when times are hard, people become more inventive out of necessity. It may also turn out that the concept of ‘local’, not ‘global’, starts to gain ground in other sectors as well as food. This could mean more opportunities for locally based businesses.
“It will be interesting to see how the shape and nature of our high streets change in the next ten years,” says Mr Lloyd Davies. “The Welsh Assembly Government appears to taking steps to help small businesses, but it’s impossible to overstate the importance of encouraging entrepreneurial creativity and new business ventures in Wales. With the right support we could see them changing the face of the high street in unexpected ways.”