It may yet become known among retailers as “Black Thursday”, the day when the doomed fate of Britain’s High Street was sealed.
It was certainly a day when the business case for the long-delayed £1.4billion redevelopment of the Whitgift and Centrale shopping centres became even weaker.
While the controversy surrounding Croydon-born Philip Green – the one-time “King of the High Street” – was dominating the newspaper headlines and broadcast news bulletins, less attention was being afforded to another announcement which would have sent a chill down the spine of those invested in retailing.
Department store chain Debenhams on Thursday posted record annual losses of £491.5million and said it will close up to 50 stores, putting 4,000 jobs at risk. That amounts to almost one-third of all its stores, and is five times as many closures as the business had previously planned.
Boss Sergio Bucher said the company was “taking tough decisions” on stores where financial performance was likely to deteriorate over time. The retailer is not releasing a list of the stores at risk of closure.
City analysts suggested that the company’s strategy will be to not renew leases on under-performing locations over the next two to three years, unless their High Street landlords are able to offer them significant discounts on their rents.
Debenhams, of course, is one of Centrale’s larger remaining tenants. New, potentially expensive, leases in new shopping malls might also be under close consideration.
On Thursday, Croydon Central MP Sarah Jones wrote to the company to seek assurances that its Croydon store will be among those not ear-marked for closure.
The Debenhams news follows the takeover earlier this autumn of House of Fraser by Sport Direct mogul Mike Ashley (who also has a significant share-holding in Debenhams). Some closures of House of Fraser stores are expected to follow, though the Croydon branch is safe, for now at least.
There have been a succession of closures among some of the most recognised outlets on the High Street. Hot on the heels of Debenhams’ announcement this week, supermarket chain Asda said it was considering closures which could see 2,500 staff lose their jobs.
And railway station and High Street mainstay WH Smith is also said to be considering a “restructuring” of its stores, which usually only means one thing.
The decline of Britain’s High Streets has forced the Chancellor, Philip Hammond, to consider a £1.5billion package announcement in his Budget speech on Monday, to include some long overdue business rate relief for smaller retailers and investment in transport and other infrastructure.
Perhaps the first big High Street brand to collapse was BHS in 2015, when it had been run by Philip Green.
Monte Carlo tax exile Green, born in Croydon 66 years ago and friend of Kate Moss, was knighted by Tony Bliar for services to… himself, mainly. Green is now at the centre of abuse allegations, which he denies.
But the BHS scandal saw the boss of the Arcadia Group (which operates stores including Top Shop, Burton and Miss Selfridge) branded the “unacceptable face of capitalism” after he flogged off BHS for £1, and the business then went into administration with a £571million hole in its pension fund, with the tax-payer picking up a large portion of that bill.
On Thursday, Green was named under parliamentary privilege as the businessman who had used the courts to gag accusations of abuse against him. Despite Green’s strenuous denials of any wrong-doing, the scandal may yet impact his Arcadia businesses, and so further damage the viability of old-style High Street retailing.
And new-style shopping malls, too.
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