Store Designs on the future

Following a year in which many retailers decided that the best course of action was inaction when it came to upgrading or remodelling store portfolios, it would be optimistic to imagine that a complete volte-face might be about to take place.

2009, after all, was the year in which many retailers met their maker and those that remained in the game saw extensive margin erosion, layoffs and cutbacks as all part and parcel of dealing with uniquely ill-favoured economic circumstances. For retailers and suppliers alike it was a fight for survival.

There were, of course, some organisations that continued to expand and to develop their store formats, but it is reasonable to remark that they were in the minority and that for most it was a matter of battening down the hatches and hoping that the storm would blow over.

Certainly, if you had talked to any of the major store design consultancies whose existence depends upon their ability to keep retailers supplied with new interiors, the picture appeared bleak. Indeed, “downsizing”, or going out of business come to that, proved almost as rife in the world of store design as it was among the ranks of the retailers they served.

And yet, a little over a month into 2010, if you have the same conversation with retailers or store design consultancies, the picture is rather different and there seems to be a new found optimism. The question is not only why, but whether this is just a bounce based upon better than expected Christmas trading, which could crumble in the face of uncertainty about what might lie beyond the upcoming general election?

Jeff Kindleysides, managing director of design consultancy Checkland Kindleysides, which numbers Timberland, Levi’s and Clarks among its clients, is bullish about the status quo. “We’re quite positive about what’s happening. We’re doing a lot of US work that came about as a result of favourable exchange rates about 18 months ago and things just continued from there.”

He continues: “There are a lot of new business enquiries at the moment - quite a lot more than we’ve seen for a long time. There is a bit more 2D than 3D work. People are trying to see how they can reconfigure what they’ve got through the use of visual merchandising and point of sale in the sense of making things happen. It’s about traditional shopkeeping.”

Make do and mend

Maybe so, but two things are apparent from this statement. The first is that there is a somewhat make-do-and-mend attitude to a lot of store design at the moment, as evidenced by the fact that graphic, rather than structural or equipment changes, are what are being asked for.

The other point is that a fair amount of what is happening for Checkland Kindleysides is offshore rather than in the UK - although currently the company is working on a major update of the Levi’s flagship on Regent Street, due for completion in March.

That said, for those retailers that are doing well, it looks like full steam ahead in terms of store design. Matt Davies, chief executive of Pets at Home, which last month became the property of private equity company house Kohlberg Kravis Roberts for a cool £955m, following its sale by Bridgepoint (which acquired it in 2004 for about £230m), says that nothing has changed.

“We’ve had some strong numbers and so we’re focused on opening all of the stores that we planned for this year. We’re doing a massive piece of work that aims to take what was done in the New Malden flagship and make that work in a [much smaller] 10,000 sq ft space,” he says. The refit of the New Malden flagship referred to by Davies took place in December and the current work is on the Derby branch.

Much of what has been done in-store at Pets at Home is the result of the collaboration between design consultancy 20/20 and the retailer, which kicked off with a new look store in Romford, Essex, in 2006. Its success must, in part, be the outcome of consistent design work over close to half a decade, putting the retailer in a position to take advantage of conditions during 2009, rather than bemoaning changed economic circumstances.

The same might be said of Marks & Spencer, which started its store modernisation programme in the middle of the noughties, and then rather put the brakes on during 2009. Its financial increases have not measured up to those of Pets at Home, although there is the matter of scale, but it is difficult not to wonder what might have happened if Sir Stuart Rose had not approved the decision to take the design bull by the horns and to dig deep into the capital expenditure budget.

M&S director of store marketing and design Nayna McIntosh says: “We have continued to progress. While the scale of it has continued in the current climate, the scope of it hasn’t.”

This might be seen as a recognition of economic reality over the past 12 months, but in 2010, M&S is once more cranking up its efforts to ensure it provides store environments that its customers will want to walk through.

A change in designs

All of which might account for the upbeat tone of Bill Cumming, creative director at design consultancy Twelve. He says: “For us it’s been a complete change from last year. In 2009 retailers were working on value in terms of ‘let’s cut costs’. Now value is viewed in terms of quality - so there’s a bit more confidence. As things stand, it’s not just a matter of keeping existing customers, now there is room to broaden your base as well.

“We probably had our best January ever. January is traditionally a terrible, terrible time, so if retailers are doing things this month, then there is confidence for March and April.”

Are we therefore about to see a burst of new store formats, redesigns and refurbishments this year on a scale not seen since, well, 2008? The chances seem good that we will not.

Whatever retailers may say about ignoring the forthcoming election, there is a palpable degree of apprehension about what may happen in a new political landscape, of whatever colour, and this provides, as one design consultant commented “another excuse not to do anything”.

The big players are likely to keep their store design programmes rolling, for no better reason than that the capital expenditure to support this will have been signed off some time ago. At DSGi, for instance, which started to change the appearance of its PC World and Currys stores a couple of years ago following a makeover, courtesy of Dalziel + Pow, DSGi chief executive John Browett said last month that the performance of the retailer’s Megastores and 2-in-1 stores (joint PC World and Currys stores) had been “particularly pleasing”.

Practically, this means retailers that continued, albeit on a modest scale, to invest in store design during 2009, are beginning to see the benefits of their labours. However, whether those that effectively mislaid their wallets during 2009 will miraculously find them once more merely because we have moved into a new decade is something of a moot point.

Perhaps David Dalziel, creative director at the eponymous design consultancy, does much to sum up the mood: “This year has seen recovery and it actually started towards the end of last year. So for us, the depression was short lived. We’re now in the position of looking for staff, which is something that we thought wouldn’t happen. We’re operating at a level ahead of 2008, so we’re hoping that things are back where they were. It’s also worth mentioning that a lot of our work is coming from overseas.”

Back from the brink then, but not necessarily entirely down to UK retail plc. Confidence? Yes. Certainty? Probably not.