Blog: Bricks and mortar retailers must learn from HMV and Jessops' mistakes

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In this increasingly digital world, bricks and mortar retailers are being forced to revaluate store estates to find the right balance between online and physical stores.

But most retailers seem to be dragging their heels, with traditional bricks and clicks retailers working hard to retain their store numbers, despite the collapse of big retailers Peacocks and Clintons last year pulled down by their over-burdensome store estate.

So far in 2013, both camera specialist Jessops and entertainment retailer HMV have collapsed into administration due to an increasingly irrelevant offer.

But looking at the rent and leases HMV and Jessops were paying on some stores, it puts into perspective the onerous cost of property in the current climate.

In leaked documents seen by Retail Week, Jessops’ most expensive rent was on its Oxford Street flagship, at £375,000 a year. The lease wasn’t due to come to an end until 2026. Out of the whole 187-store strong portfolio, more than 50 leases weren’t due to run out until 2020 at the earliest.

HMV’s store estate wasn’t much better, showing the Glasgow Fort site signed up until 2029. Meanwhile its flagship Oxford Street store was costing the retailer £3.2m a year, while the lease wasn’t up for renewal until 2027.

With huge bills like this at a time when consumer spending has plunged, it’s not surprising that some of our best known brands are hitting the wall.

In addition, large business rates bills have helped significantly drive up property costs and they are not about to ease with another £175m set to be imposed on retailers this year. The Government told Retail Week that it will not be freezing business rates this year, despite the huge support Retail Week and the BRC’s Fair Rates for Retail campaign has gleaned.

Without help from Government - and more realistic rents from landlords - it seems inevitable that more high street shops will continue to be shuttered, leaving our high streets, as we know them, facing a bleak future.