Anna Smith, commercial surveyor at Brown&Co in Norwich, discusses the future of the high street after The Body Shop entered into administration.
The Body Shop is the most recent UK retailer to announce store closures after going into administration.
The cosmetics and skincare brand, made up of company-owned stores and franchises, is now restructuring its business operations to be more financially stable. As a result, more than half of The Body Shop’s 200-strong cohort of stores are scheduled for closure.
What may happen next is the renegotiation of contracts with property landlords before the business is handed back to its owners, private equity firm Aurelius. Beyond that, the future is uncertain.
It is certainly becoming more common for high street retailers to seek early intervention by reducing their footprint in low-performing locations, shutting stores whilst waiting for the leases to expire. But what impact does that have on the landlords of these properties?
There is an argument that landlords should provide more flexibility and allow for rent reductions and looser alienation clauses to allow tenants the ability to sub-let. However, is this realistic given their own investment criteria – and is it sustainable?
We act on behalf of many clients in which negotiation over rents is required, along with a close look at the terms and conditions of leases. Those negotiations can often mean the difference between high street stores being occupied or remaining empty.
My view is that, of course, we should do our best to avoid commercial property vacancies, to not only provide an income for the landlord and mitigate their business rates liability but to support the other retailers in that location. After all, the central role of the high street is convenience and bringing people together in one location.
If landlords are able to support their tenants in reinvigorating their brand by integrating the online and physical store experience alongside other core initiatives around sustainability, community responsibility, diversity and inclusion, the high street may fare a little better in the years to come.
Luckily the Norwich Body Shop in Castle Street is operated as a franchise and will continue trading while the firm is in administration, which is good news for the city.
If you need commercial property advice or have premises to rent or a tenant looking for a unit, please contact Anna Smith at Brown&Co in Norwich on 01603 629871.
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