Streets of shame

London: Piccadilly Circus is the greatest show no more

A gaping void in the old Tower Records building, a souvenir shop about to open in the old Sogo department store and now a budget sports goods store in what was once Burberry’s swish headquarters: Piccadilly Circus isn’t what it used to be.

Decades of tourism and changing shopper habits in the West End have taken their toll on the once buzzing streets around the circus, which most people now know for the bright lights and souvenir shops rather than the Victorian grandeur that was once dubbed the centre of the British Empire.

“Piccadilly Circus used to be one of London’s prime areas,” says James Andrews, partner at property agency Kitchen La Frenais Morgan.

There has been a resurgence in the tatty souvenir shops that have taken the sheen off Piccadilly Circus and some unfortunate events have made things even worse. The void created when Virgin closed one of its stores at the top of Haymarket has been a blot on the landscape for the best part of four years and since Zavvi’s collapse the landmark Tower Records store on Piccadilly Circus has been empty too.

Another symbol of the area’s fall from grace is the transformation of Lillywhites. Once upmarket, eclectic and one of the most famous sports stores in the world, Sports Direct tycoon Mike Ashley’s ownership of Lillywhites has resulted in a discount retail emporium that critics say has lost the affection of dedicated sports enthusiasts.
But the area’s biggest landowner, The Crown Estate, has a plan to turn Piccadilly Circus into a fashion and shopping destination to rival other hotspots nearby - something that has proved easier said than done.

The landlord attracted criticism in April for its decision to block TK Maxx from opening a store on Haymarket on the grounds that it was not sufficiently upmarket. But that decision now looks bizarre given that it has had to accept yet another souvenir shop, Cool Britannia, in the large and prominent former Virgin site instead.

One leading property agent, who asked to remain anonymous, argues that The Crown Estate missed a chance to draw in serious shoppers. He says: “I can’t help but think that if The Crown Estate had seen through its blinkered vision and put TK Maxx in there you would have the start of a decent fashion offer.”

One good piece of good news is that there are stronger retailers lining up for the old Zavvi store at No 1 Piccadilly, and considering this is perhaps the most prominent spot in the whole area, a good signing should help set a new tone for the location.

One of these, as Retail Week revealed (May 1), is The Sting, a Dutch multi-brand fashion retailer with a good reputation around Europe. At the moment it looks like the front-runner but is still waiting for approval. If The Sting does win the day - other names including HMV and HSBC have also been linked to the building - it should be a step in the right direction.

The Crown Estate is also busily setting about raising the bar in the streets around the circus. After months of improvements to the retail offer on Regent Street, it is now undertaking what it describes as “an ambitious mixed-use scheme” on the Quadrant at the bottom of the street and has longer-term plans for the St James’s area south of Piccadilly Circus.

The Crown Estate head of Regent Street portfolio David Shaw says: “As a major landowner in Piccadilly Circus and the surrounding St James’s and Regent Street area, The Crown Estate is working hard to improve the quality of the public realm, retail and office space available.”

As part of the rejuvenation of St James’s, The Crown Estate will seek to improve about 500,000 sq ft of retail space on streets including Haymarket, Jermyn Street, Lower Regent Street and Pall Mall over a five-year period.

The Crown Estate has its work cut out. Trying to turn the tide on decades of tourist footfall through Piccadilly Circus and winning Londoners as well as tourists is going to be tricky.

Edinburgh: Princes Street gets trammelled

Last month the Scottish Retail Consortium reported that April like-for-like sales rose 4.3 per cent and that total sales were 8.2 per cent higher than in the previous year.

The timing of Easter and unusually high temperatures were the reasons given for the rise as clothing, footwear and outdoor pursuits all benefited. Edinburgh will have shared in this good news as locals and the usual quota of tourists helped to keep the tills ringing. However, nothing is forever, and last week brought the delivery of the first tracks that will eventually form the basis of a tram system easing shoppers’ journeys in and out of the Scottish capital.

The immediate outcome of this is a large trench and steel fences along Scotland’s premier shopping street, accompanied by the usual traffic chaos that accompanies such things.

In more normal times a little difficulty in reaching the shops as a result of a major civil engineering project would probably be regarded by retailers as part and parcel of the pain required to maintain a competitive edge. But as times are self-evidently far from normal, upheaval of the kind now under way along Princes Street is
distinctly unhelpful.

A spokesman for Edinburgh’s Chamber of Commerce said: “Trade has definitely been hit by the tram construction process. At the moment, Princes Street is sitting with 6 per cent empty units but, providing people can survive the upheaval, things will improve. We look at what has happened in Dublin and things are definitely better as a result of the tram.”

Scottish Retail Consortium spokesman Richard Dodd said: “A number of retailers are expressing serious concerns about the extent to which the disruption is putting shoppers off visiting Princes Street. Having said that, you’ll find that most of the traders on the street are in favour of this in principle.”

Those charged with making the £545m tram project a reality say that the Princes Street stage of construction will be complete by November. Track-laying along Leith Walk, another focus for shoppers and the eastern continuation of Princes Street, is planned to start in September.

Meanwhile, stores including House of Fraser-owned Jenners, Bhs, Debenhams and Marks & Spencer, among many others, are likely to see takings suffer as the contractors rumble.

Tom Campbell, chief executive of Essential Edinburgh, a business improvement district supporting retail in the Scottish capital, takes the long view. “In order to maintain its status as a world famous retail destination we need to invest in Princes Street.

“The tram works will, ultimately, make it easier to get people into our city centre and while it is undoubtedly difficult now, long-term, retailers will benefit from today’s investment
in our transport infrastructure.

A lot is being done to mitigate the effects of the tram works and remind shoppers that Edinburgh is still open for business.”

Maybe so, but the timing of the tram installation looks unfortunate.

Manchester: Has King Street’s crown slipped for good?

It used to be known as the Bond Street of the North. But today, Manchester’s King Street looks a shadow of its former self.

A browse on property website Shopproperty.co.uk reveals 15 either retail or leisure units on the market what was always the home of high fashion in the city. And a walk down the street on a midweek afternoon reveals an almost eerie quiet on the pedestrianised thoroughfare.

Seven shops on the street are empty, with brands such as Oasis, Warehouse and Dorothy Perkins having gone.

Others are keen to follow - All Saints at number 52 and Mulberry at 62 are on the market, and The White Company, Timberland and Body Shop stores are also said to be available. Even the ubiquitous Starbucks has closed.

But even though footfall is down, units don’t come cheap. Rents soared as high as £200 Zone A in the 1990s, the heyday of the street’s fame as a fashion destination. With a sales area of 2,300 sq ft, the All Saints store has a rent of £187,500 and estimated rates bill of £77,600 a year. “Some retailers just aren’t making any money there,” says Jones Lang LaSalle director Tim Lloyd.

Those retailers with stores on the market shouldn’t count on offloading them in a hurry. At number 35 the Virgin Megastores logo is still visible - it never even made it to the Zavvi era - while the marketing particulars for the Jake Shoes unit at number 28 optimistically state: “The premises will be available for fitting out in January 2008.”
While Manchester is by no means immune to the wider recession that is hitting the whole retail market, there are local reasons why King Street seems to be hurting more than elsewhere.

For a start, Manchester is not short of space for upmarket retail. To one side of King Street, the city core has expanded with Selfridges and Harvey Nichols surrounded by a group of aspirational fashion brands such as Hobbs, Reiss and Ted Baker on New Cathedral Street, while at the other end of the city the giant new Spinningfields office development is hoovering up retail tenants.

Mulberry, Armani and iconic designer store Flannels are among those brands that have been coaxed away from King Street to Spinningfields, encouraged by generous incentives and turnover-based rents, which are significantly lower than the established retail core. “Spinningfields have very soft deals to play with,” says Tony Devlin of CBRichard Ellis, “because it’s an office scheme with retail on the ground floor”.

Hopes of a recovery for King Street are low, not least because of the rates rise next year, which will be based on the street’s historically high rents.

What distinguishes Spinningfields from King Street is unified ownership. At a discussion held by the Manchester Fashion Network earlier this month, the consensus was that King Street’s landlords are to blame for the street’s problems because they have unrealistic rental expectations, while developments such as Spinningfields have one landlord with a coherent retail strategy and flexibility on rent.

While the city’s mass-market retail offer seems to be doing well, aspirational and upmarket brands have no shortage of space to choose from in central Manchester. It’s not just King Street that’s struggling - nearby St Anne’s Square has also lost its lustre, while the Triangle development struggled from day one.

And while the availability of space on great terms represents an opportunity for retailers, it heightens the need to ensure they choose the right space.

The state of King Street presents a dilemma for those on the city’s most prestigious shopping thoroughfare - should they stay or should they go?