Our retailing correspondent, MT WALLETTE, on the latest dire news for plans to base the regeneration of Croydon on the building a shopping mall
Today’s announcement to the London Stock Exchange of a two-thirds fall in annual profits for Marks and Spencer is just the latest piece of hard data from the retail sector to stoke growing fears over the prospects for the £1.4billion Westfield and Hammerson scheme to redevelop Croydon’s Whitgift and Centrale shopping centres.
“Hammersfield” was granted planning permission by Croydon Council – for a second time – six months ago. What was originally devised as a supermall with some flats tacked on was now being proposed as a 1,000-homes residential development, with a shopping centre tacked on.
But traders and shop-keepers in the increasingly run-down Whitgift Centre have been given no updates on when the bulldozers are likely to move in since planning permission was granted, fuelling speculation that any prospect of a start in “early 2019” is becoming more remote.
Croydon’s town centre has suffered from a development blight since 2012, when Tories Gavin Barwell – then a trustee of the landowners, the Whitgift Foundation – and Boris Johnson first championed the “Croydon Partnership” between Westfield and Centrale owners Hammerson.
The latest announcements from M&S ought to be cause for particular concern in Croydon, because Marks and Sparks remains the only confirmed taker of an “anchor store” in the revised Westfield plans.
That’s the same Marks and Spencer who yesterday announced “accelerated” plans for more than 100 store closures by 2022 – 1 in 3 of its core clothing and home stores are scheduled to disappear from the high street within four years.
Recent closures of entire high street chains, such as Toys ‘R Us and Maplin, and dire trading announcements from Mothercare and House of Fraser have also testified to the change in the public’s shopping habits – something which was entirely predictable in 2012 when Barwell and Bozo announced that Croydon’s future could be transformed by retail therapy.
Certainly, that appears to be the view of M&S chief executive, Steve Rowe, as he has seen his company’s share of sales transfer to the internet and to no-frills chains such as Primark, Aldi and Lidl. “Together with a challenging UK consumer market, [these developments] mean that we have to modernise our business to ensure we are competitive and reignite our culture.
“Accelerated change is the only option.”
The Guardian quoted retail analyst Richard Lim as saying, “M&S has too much space in today’s digitally driven age of consumption. These are bold decisions to embrace, adapt and innovate in order to survive.”
When asked by Inside Croydon whether the company retains its plans to move into a larger, re-built store in Croydon’s Westfield, a M&S spokeswoman said, “We will update further as and when it is right to do so.”
Last week, Mothercare announced its own “accelerated” plans for store closures. The baby products retailer said it was in a “perilous” financial position, and has decided to close 50 of its 128 stores by 2020, with a loss of around 800 jobs.
Which stores are to close have yet to be announced; Mothercare has two stores in Croydon, one in the Whitgift Centre, another in the retail park on Purley Way.
And the fate of Croydon town centre department store, House of Fraser, remains in doubt, at least until the start of June, as the owners undergo a corporate “restructuring”.
As part of a takeover by Chinese retailer C.Banner, the retailer is preparing a Company Voluntary Arrangement, a CVA, which may involve widespread store closures.
“There is a need to create a leaner business to serve rapidly changing behaviours of customers,” Frank Slevin, the company’s chairman, said last week, adding that it needs “stores of the right size and location’’.
The CVA is designed to help the struggling company to pay back a proportion of its debts over time. It involves a strict repayment scheme overseen by an insolvency practitioner and must be approved by at least three-quarters of the firm’s creditors.
A spokesman for House of Fraser told Inside Croydon today, “We cannot provide any commentary on specific stores or developments; details of the CVA will be announced at the beginning of June. A CVA can take a number of formats, including a rent review, lease restructurings, and store closures. It is not limited to any of these options.”
Of course, none of those options are particularly helpful to those in the shopping centre business, such as Hammerson and Westfield.
Additional research by Marcus Tyler and Owen Hethersay
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