‘New retail is thriving, but many physical stores face a long haul back’

An indicator of positive news is the number of new companies going public via IPOs. Already in 2021, Dr Martens, Moonpig, Virgin Wines, In The Style, Deliveroo, MusicMagpie, Victorian Plumbing and Made.com have all listed on the London exchange. 

Unsurprisingly, there are some common themes to this group – most of them are relatively young businesses and they don’t have many, or sometimes any, physical stores.

In the same vein, one of the companies I chair – Mister Spex, an eyewear retailer based in Berlin – listed at the beginning of July in Frankfurt at a valuation of €829m (£709m). 

It is a shining example of ‘new retail’. While ‘old retail’ labours through an agenda of addressing diminishing brand relevance, lack of purpose and the economics of having too many physical stores, new retail is focusing on how quickly it can grow.

Mister Spex began trading in 2008 as an online pureplay selling third-party branded eyewear and subsequently added own-label products. 

However, in the past few years it has morphed into an omnichannel business and now has 41 stores in Germany, Sweden and Austria. A Mister Spex shop has the look and feel that might be expected of an Apple store.

While ‘old retail’ labours through an agenda of addressing diminishing brand relevance, lack of purpose and the economics of having too many physical stores, ‘new retail’ is focusing on how quickly it can grow

The expansion into physical retail is interesting because the eyewear sub-sector is another example where the combination of digital and physical channels is helpful to the customer. 

Similar to the purchase of a sofa that you want to sit on, or a bed that you want to lie on, eyewear purchases can benefit from physical intervention to ensure you have the right fit, particularly if you are buying glasses with varifocal lenses, for example. 

One day, I am sure, there will be a technology solution to address this aspect. Already Mister Spex is working on 3D-printed frames and an online eyewear examination.

The global eyewear trends are positive, with the market increasing in size due to the growing prevalence of both myopia and glasses as a fashion item. 

Also, in the case of Mister Spex, its already recruited digitally native younger cohorts will require more eyewear as they get older.

The Mister Spex challenges are positive in terms of how quickly it can grow and exploit advances in technology. 

The slow return to stores

Sadly, positive news isn’t repeated everywhere.

There is a long haul under way to bring customers back into retail stores. While local and edge-of-town shops may be enjoying reasonable trade, the same cannot be said about large city centres and malls. 

The pandemic means people are spooked about travelling on public transport and what happens when they get to their destination. There won’t be a defined moment when everyone returns en masse.

Nowhere is this more evident than in central London. Absent office workers and overseas tourists in areas such as the West End are compounding the problem. 

While the pandemic has proved that a greater proportion of work can be done at home, people still need the office environment for team working, personal development, networking and other skills that require face-to-face interaction. It is vital for our mental health

Realistically, it may take years for the number of overseas tourists to return to pre-Covid levels. However, more can and should be done by employers to encourage people to return to offices. 

It is far too glib a response to say it doesn’t matter whether you work in the office or at home. While the pandemic has proved that a greater proportion of work can be done at home, people still need the office environment for team working, personal development, networking and other skills that require face-to-face interaction. It is vital for our mental health.

Our overriding natural desire as humans to be in the company of others will come to the fore, and make us all feel more positive about ourselves and the world we live in.