‘Successful investment’ Boxpark reports a £500,000 loss

Boxpark Croydon made a loss of nearly £500,000 last year, according to accounts filed to Companies House.

Open all hours: Boozepark

The operation, renting space to independent outlets selling street food and staging music and other events in a collection of disused shipping containers next to East Croydon Station, opened in October 2016 thanks to a chunky loan from Croydon Council of £3million, plus another £180,000 grant of public cash towards its launch party.

Last week, Tony Newman, the leader of Croydon Council, during a council cabinet meeting presentation, referred to Boxpark as a “successful investment” by the council.

The company’s filed accounts cover the period to the end of April last year – and therefore reflect the first six months of being open for business in Croydon, with all the attendant set-up costs. The accounts were lodged by the private business’s founder, Roger Wade.

Wade, as company director, opted not to include the company’s profit and loss account.

The balance sheet shows that the business’s net equity deteriorated from -£75,000 to -£523,000 to April last year. Click here to download a pdf of the Boxpark accounts.

The venue has suffered a haemorrhage of food outlets, from the 40-plus at the time of the grand (and council-subsidised) opening, to 34 by Christmas 2017. According to Boxpark’s own website, the past month has seen another six food outlets join the exodus, as they now list 28.

The company is now keen to extend the trading hours for its own BoxBar outlet, with an application to the council’s licensing committee to stay open into the early hours at weekends.

A planned meeting of the council’s licensing committee last month was hastily cancelled. It had been thought that the meeting was to consider a licence extension request for BoxBar. The company submitted a formal application for late night boozing on January 15. Click here to read the licence application.

Council leader Tony Newman, right, with Roger Wade: Boxpark is a ‘successful investment’ of public money

This licence extension for one business operating within Boxpark serves to further highlight the imbalance in competition between the landlord and Boozepark’s tenants.

Boxpark uses its tenancy agreements to curtail the times when its tenant outlets can sell  alcohol. And the outlets, each struggling to make a go of their business in competition with their neighbours, also suffer other restrictions.

On New Year’s Eve, which is usually one of the busiest and most lucrative nights of the entire year for clubs and bars, the popular Cronx Bar at Boxpark could be seen to be dark, and closed.

They were unable to trade late into the evening because its landlords were staging a rave inside (tickets: £33 and upwards). With the Cronx Bar being located on the exterior of Boxpark, their customers would not have had easy (if any) access to the ticket-only area inside, which is where the venue’s toilets and other facilities are to be found.

According to one Boxpark trader, they are paying £2,000 per month unit rents and £750 monthly service charges, to include the use of such facilities for their customers.

Another Croydon Boozepark outlet has told Inside Croydon that, under their tenancy agreement, they have been banned from even advertising on their own publicity that they even sell wine or beer – the suggestion being that the landlords want to monopolise the lion’s share of booze sales in Boxpark.

There has been an exodus of some independent outlets from Bozpark recently

It is understood that Boxpark made a full first-year installment on its loan from Croydon Council last year.

But the licence extension presents another ethical conundrum for Croydon Council.

“If Boxpark are losing about £500,000 per year, it is no surprise that they are seeking  extended hours for booze sales, as that would presumably help with net income,” a Katharine Street source said.

“But how Croydon Council’s licensing committee can be independent in determining that matter, given their £3million financial exposure with the business, is highly questionable.

“If the current situation continues, debt will increase until they run out of cash or people willing to lend them money. Croydon Council have a charge on the company but the building would not be of much value if it cannot be operated at a profit, as seems the case. Furthermore as the lease on the land gets shorter, any charge becomes of less value to the point where there remains just a  liability for removing the building.”


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News, views and analysis about the people of Croydon, their lives and political times in the diverse and most-populated borough in London. Based in Croydon and edited by Steven Downes. To contact us, please email inside.croydon@btinternet.com
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14 Responses to ‘Successful investment’ Boxpark reports a £500,000 loss

  1. I really would have liked to see Boxpark succeed but, like so many other projects, it was the wrong thing in the wrong place at the wrong time. I still have similar residual feelings about Westfield.

    One of the first jobs for the “new” Council convenes in May should be the creation of a public archive in the lobby of Fisher’s Folly.

    It should be labelled “Our Notable Failures or Folie de Grandeur Failures” and should have the following exhibits, to begin with:

    Boxpark
    The Uselessly Prettified Market
    The Underground Art Gallery
    The New Fairfield Without a Car Park
    The Useless Extention of Pedestrianisation in the High Street
    (Possibly) The New Westfield which May Not Come to Be
    The Incomprehensible and Illogical Maze of One Way Streets in the East

    and many more.
    That may help the new Council to think more carefully in the future and to consider projects more for the way in which they might enhance the life of the citizens of our fair town and less for their looks and trendiness.

    Liked by 2 people

  2. Im afraid that Croydon and Boxpark just do not mix.
    I think Boxpark have made mistakes. Music is incompatible. Prices are way too high. I assume this is due to high overheads. Even the choice of beers is terrible. There is a good reason why the main pubs sell Fosters, Carling etc…its what people want.
    Frankly Boxpark is trying to tell people what they want, and it doesn’t work. I don’t even really think Croydon has the type of people suited to it. Were hardly the capital of hipsters!!
    Its been a very disjointed affair that Croydon Council have ludicrously got themselves entwined with due to their hefty loan.,They really will look silly if it goes belly up.
    The only thing we can hope for is a complete rethink. However with 16 empty units is this already the beginning of the end for Boxpark Croydon?

    Liked by 1 person

  3. janetdesilva says:

    This is generally how accounting works. An alternative headline could be “New retail building experiences greater expenses than turnover in first year” – entirely normal when you’re setting up.

    Like

    • Up to a point, Lord Copper. But this start-up business also received a £3million loan and £180,000 council subsidy.

      Fold into the mix the exodus of its tenants in the past few months, down from 40-plus to 28 now, and you have a start-up with diminishing income, and loan repayments due.

      What has Croydon Council done to protect the public investment?

      Liked by 1 person

      • derekthrower says:

        I didn’t realise that only 28 tenants are now located on Box Park. It doesn’t matter about tinkering with licensing laws and what alcohol you can sell. It appears that the whole project is simply not viable without major reductions in rent and further losses before any chance of the Council making any return on their investment. As usual public relations and the fantasies of aspiring have trumped any good financial sense. The local authority should to stick to running public services rather than acting as taxpayer loss making carrot for fickle private property developers. How long before we hear about how much is going to be written off?

        Liked by 1 person

  4. combyne says:

    as mentioned previously – visited once, and never again.

    Just who is the target demographic audience?

    It is simply not clear.

    Liked by 1 person

  5. I’ve been in once, I had a pizza and my wife and kids had a curry. All very nice and there was plenty of choice, but £5 for a ropey pint of lager was not clever and it was a bit noisy even mid afternoon. I should have gone to Cronx for the beer, but it was only a quick stop off for a bite to eat, I couldn’t stay there very long, it would be far too annoying and expensive.

    Liked by 1 person

  6. Roger Wade was informed that the business would fail, but he chose to ignore these warnings and instead opted to throw his weight around instead.

    collapse stage 1 – operators who had one or a few other retail sites would be the first to exit the location – this fits exactly the type of units that have left bukowski, potato project, mud, knot

    collapse stage 2 – the sole location operators would cling on for dear life as its their only concern, but eventually their backs will be broken + the operators with many other outlets would eventually take a look at their spreadsheets and make clinical decisions to immediately cut their boxpark operation, shutting up shop overnight and vacating their units ( 2,3,4+ containers) . Once one of the bigger ones go, it will create a domino effect with the other large operators

    collapse stage 3 – time is running out on the lease, added with the exit of the majority of the operators, but Boxparks inability to drop rents etc, will mean the venue becomes a ghost town leading to a heavy increase in the use of the venue as a music venue, leading no doubt to a major incident which wil finally kill the place off
    end result – the £3m will never be repaid and the structure will resemble the rest of croydon eg st georges walk

    Dodger Wade or Bodger Wade. Take your pick

    Liked by 2 people

  7. And the final mantra should be, pace Derek Thrower: The local authority should to stick to running public services rather than acting as taxpayer loss making carrot for fickle private property developers.

    Like

  8. i see boxpark wembley is due to open later this year. i see from the artist impresssions of the layout that it is following the same blueprint as the croydon debacle.

    the definition of idiocy is doing the same thing over and over but expecting different results. there are many idiots out there, alarmingly so the more you go up the pyramid, and dangerously so when it involves the public purse. the crash will leave egg on a lot of faces and unfortunately the taxpayer will have financed it

    Like

  9. Lewis White says:

    In spite of this style of pseudo cutting edge development not being my own cup of tea (thinks–must pop in to see if I could buy one) I hope that this doesn`t fail, for the sake of all the workers and managers, and the public purse, which lent it the money you mention, but also the young people who go there.

    The quicker we get all the surrounding offices and flats finished, the better, to get the critical mass of people living and working with spare cash to spend in Boxpark and elsewhere in town.

    The “polo” town with the dead hole in the middle, occupied with empty-ish office blocks, Croydon is still rather like the City of London used to be on Sundays, a ghost town. Sadly , without the River Thames, Guild Hall, Barbican centre, Bank of England, the Tower of London and dozens of ancient churches.

    Lets hope that urban Croydon can rejuvenate quickly but well.

    The only part of real interest to me is London Road West Croydon, with its urban and multi cultural mix of Asian, Afro Caribbean, and now Eastern European shops, South End with its restaurants, and above all, the Surrey Street / Crown Hill area with the beautiful parish church and several ancient buildings that exist inside later frontages.

    If only we could identify and restore all of the remaining half-timbered real Tudor buildings in this area, and find appropriate uses for them. That would be great !

    If only that lovely Moorish style waterworks pump house could be converted to an arts venue for medium size live performance– why could not Croydon College buy it, and designate it as an Arts centre or Great hall. Could not the Brit School do music inside it, and stage “Croydons got talent” there !

    And maybe the Cronx brewery could set up a tap house in this area. If so, my joy would be complete!

    At age 63, having known Croydon for decades, I am just wondering if it will come to new life in my lifetime. I really hope so. 25 wasted years of town centre decline are so sad.

    ps ……. and could we not host an urban zip wire facility, from the top of the tallest tower blocks, so that people could become superheroes for a few hours before going for pie and mash or a nice curry , or Boxpark burger.

    Like

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