REVOlution In Retail: What Did Department Stores Get Right?
On a Glasgow street corner in 1849, Hugh Fraser co-founded the business that would become House of Fraser. Repurposing space previously used for wholesale, the retail operation grew and grew. In the 1950s that business seized its opportunity and, through a series of acquisitions (which included Harrods), transformed and adapted itself to become a national chain.
In Manchester in 2018, sector transformation, repurposing and adaption in retail are headline themes at the upcoming REVO Conference (to be held on 18 – 20 September). In their day, Hugh Fraser and his offspring could have been keynote speakers on those topics. But this is not their day. In 2018, the House of Fraser business has experienced traumas like never before and, as such, is representative of large parts of the retail and leisure sector.
The purveyors of department stores, such as the Fraser dynasty, knew that customers (young, middle aged and old) had to be at the centre of a successful retail offering, providing as they did for a true "experience" and a broad selection of goods and wares. But what was once found across several floors of prime city centre real estate can now be accessed by a few clicks.
Amazon is the natural successor to the department store and never stops adapting to its customers' requirements through a head-spinning use of data. With this trillion dollar behemoth as opposition, should more traditional retail simply capitulate?
Perhaps not. Like Frasers did in its day, retail needs to apply transformation, repurposing and adaptation to the current landscape and find new pathways forward. And these tools need to be applied to all areas – including retail property.
How retailers use occupational property can be transformed. Redundant occupational space designed for another era can be repurposed. The rules of the occupational game – being those found in full repairing and insuring leases – can be adapted.
Property has become a millstone around the neck of retail, hence the CVA having become so popular of late. Investors, landlords, funders, developers, communities and neighbourhoods all have a vested interest in making retail property an attractive proposition once again – not a perilous liability. As such, flexible lease terms, policies to address the rates burden and innovative planning solutions which will see town and community centres being repurposed to fit with modern living will be welcomed by all.
I look forward to the discussion on all of this and more in the conference rooms and corridors at REVO.
Written by Graeme Bradshaw
Graeme is a specialist commercial real estate lawyer. He has a particular interest and expertise in the law relating to commercial property leasing and is...
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