Ok, so Banana Republic’s Regent Street adventure, which starts on Thursday, is an exception. All that is happening here is that this division of Gap Inc is joining the other UK retail one-offs that have clubbed together to change the face of that half-mile stretch of Central London.
But then think about Terminal 5 and all the effort that has gone into creating new formats there. Or, further north, you might consider the cluster of retailers that are opening large shops on the edge of Manchester’s Trafford Centre to carve out a£76 million homewares destination dubbed Barton Square. This northwestern homewares party will have the likes of Next Home, Habitat, Dwell and Marks & Spencer Home among its invitees and may well prove a draw.
But all of this activity and there is more to come, is being driven less by a desire to increase sales than by leases signed sometime back by retailers operating under more benign economic conditions.
And, although no retailer will admit as much – at least on the record – in their more private and unguarded moments, there are a few who will express the view that they wish they hadn’t agreed to buy into schemes still under construction.
For most, these things take on inertia of their own. The deal on a unit has been agreed, so call in the architects, set the store design people to work and decide which shop fitter will do the best job. And that is just the new shops. For many of the larger retailers there is also the matter of sizable estates that need almost continuous updating.
But there is a way forward, at least if the rumoured actions of one of our biggest retailers provide any kind of guideline; and that is to put everything on hold. Suppose, just suppose, you were a national food and fashion retailer that was not far off completing a substantial refurbishment programme on a very large store portfolio, when sales in the shops suddenly looked anything other than positive. Given that, in an ideal world, capital expenditure should be reliant on profits coming through from the shops then, if things fail to live up to expectations, wouldn’t it make sense to call a halt until matters improved?
This is what one retailer is understood to be doing and it makes good sense. It is completing its higher profile projects, but the rest have been put on the back burner, for now. For some, this might be seen as a sign of weakness, but for more rational folk, it is just plain common sense.
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