'All bets are off': What does the future hold for Topshop and Debenhams?
- Credit: Neil Didsbury
Britain's beloved high streets are set to shrink at an accelerated pace as online-only retailers begin snapping up household brands.
In the past few days alone Debenhams has secured a buyer in the form of online women's fashion retailer Boohoo with Sir Phillip Green's Arcadia turning to Asos for eleventh hour talks.
Debenhams has already confirmed it will close its sites and shops under the Arcadia umbrella - Topshop, Burtons, and Dorothy Perkins to name a few - seem set to suffer the same outcome under an online-only buyout.
The news will leave gaping holes in the high street in prime locations both in the city and in Norfolk's market towns.
But with adversity comes opportunity says Guy Gowing, managing partner at estate agents Arnolds Keys.
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"In the next month or so we will potentially have some of Norfolk's prime locations vacant - and for a shrewd business that is a very rare opportunity. Debenhams and Topshop in Norwich are both in great locations for passing foot traffic down St St Stephens and running through to the market square.
"In 'normal' times as it were landlords would be batting away big name brands who want to take on the tenancy of a place like that - but in these times there could be deals to be made.
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"There is an opportunity for local businesses to make the leap and move to a more prime-time location. Usually they'd be shouting against big companies but in this situation landlords will take them more seriously and will be keen to get someone in."
However for outlying vacant premises and market town high streets the empty shop fronts may be a feature a little longer: "Locations outside of that prime area will take longer to be let, at least until all the shoppers return. It could be anywhere between three and five years."
But why are online giants circling brands which are well-reportedly in troubled waters?
Professor Ratula Chakraborty of the University of East Anglia explained: "Buying an established brand name can help the online seller reach new consumer segments from the loyal customer base of the brand.
"Typically, buying a brand name is more valuable for an online seller because it avoids the costs of running physical store operations, which are considerably more than the modest investment in marketing required to maintain the brand name awareness and reputation to benefit the online seller."
Capitalising on this reputation are the "canny" people at Boohoo, said Professor Joshua Bamfield of the Centre for Retail Research: "There is a lot of talk of bringing more pharma, health and beauty care to the high street - and the household brand of Debenhams would be a good vessel to bring this to the market.
"It's no fun being a third-rate retailer and buyouts like this are the work of online giants proving that they are a 'proper' retailer too - they want to move up the chain.
"All bets are off - I can see Boohoo in particular keeping some stores open to attract a different demographic than they currently have - perhaps also moving into formalwear.
"When it comes to Topshop and Asos I think it's down to what each of the brands make of their names. Asos no longer has the luxury of being the new online craze and Topshop hit its peak between 2005 and 2008. It will be interesting to see how the brands are used to revitalise and contrast each other."
He added: "Of course an online giant inheriting stores to close will leave a bitter taste in ones moth - but Topshop was rather left alone at the table because of how their stores were performing and the lack of investment."
And although shoppers can move their spend online, moving jobs to the new norm will not be as easy, said Professor Chakraborty: "There is little overlap because the nature of the jobs are different. For online retailing, most jobs are picking and packing in warehouses, which is quite different from sales assistant jobs in physical stores.
"I think we will see further store closures and the collapse of other high street retailers this year. The best hope for high street retailing is a strong return to normal shopping patterns later in the year together with a sharp fall in store rental and rates costs to help the finances and viability of retailers."