Allders, Croydon’s flagship department store since 1862, has had to go to its landlords to ask for a reduction in its rent, or even to go without paying any rent for a period, according to reports in the trade press today. Without an agreement, Allders could go into administration in less than a week, Retail Week reported.
Allders, which was previously bought out of financial administration in 2005, is struggling in the tough economic climate for retailers. Before Christmas there were rumours – firmly denied by the store – that as many as 100 full- and part-time staff faced losing their jobs if sales targets were not achieved.
Now, according to Retail Week, the 300,000 sq ft store has gone to its landlord seeking a deal on the rental payments since its takings have fallen so low.
Citing unnamed sources, Retail Week reported that if Allders fails to renegotiate its rent bill, it may have to call in the administrators in “four to five days”. Neither Allders nor the landlords were available to comment to the trade paper.
The site of the store is owned by Jupiter Properties, a joint venture between Delancey and Area Property Partners, who took control of the building as part of a £202 million purchase of the debt-laden property company Minerva in August last year.
Working in Allders’ favour is Minerva’s supportive attitude towards the store, and the reality that if the country’s third largest department store is forced to the wall, then the landlord may struggle for some time to find another suitable paying tenant.
This drama is playing out while a battle is going on between rival developers Hammersons and Westfield over the rights to redevelop the neighbouring Whitgift Centre. Lingering uncertainty over retail redevelopment plans elsewhere in Croydon has blighted Allders for the past decade, leaving the store unable to seek investment to modernise and upgrade its premises, further undermining its appeal to shoppers.
Seven years ago, fashion retail magnate Harold Tillman rescued the store from administration. Sources relate that Tillman was attracted by Allders’ stock in hand, which was estimated to be worth around three times the purchase price.
Tillman, who is the chairman of the British Fashion Council and was made CBE in the 2010 birthday honours for services to the fashion industry, has been exiting his retail holdings in the past six months.
He sold up-market tailors Jaeger to Better Capital in April for just above its level of debts, and his other premium clothing brand, Aquascutum, was placed into administration later that month. Brixton-born Tillman retains a small stake in Jaeger, but Allders is his last remaining significant business interest.
It is not the first time Tillman has hit business difficulties. He was involved in the collapse of the Honorbilt fashion group in 1990, seeing him disqualified as a company director for three years.
In February this year Tillman restructured his ownership of Allders by reducing his stake to 35 per cent while Hilco, described by The Independent as “a retail restructuring expert”, took a 35 per cent stake and Royal Bank of Scotland took a 30 per cent equity slice.
Andrew MacKenzie was appointed as chief executive by Tillman, with a brief to improve takings by bringing in more concessions – independent businesses which trade within Allders, and pay a share of their takings to the store for the privilege.
With the Christmas trading period upon which Allders depends each year still months away, and gloom and uncertainty in the retailing sector unlikely to improve any time soon, the famous old store’s management will need to conjure some accommodation from its landlords to allow it to keep its doors open.
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- “War over Whitgift” has planning showdown tonight (insidecroydon.com)
- Owners in damaging tug-of-war over future of Whitgift Centre (insidecroydon.com)
- Hammerson gets green light for £50m scheme at Centrale (insidecroydon.com)
- Aquascutum goes into administration (independent.co.uk)