In the wake of Wilko’s collapse, the future of retail feels ever more uncertain. But amid the rising challenges for our high streets, there are promising signs of success. Here commercial property specialist Riaz Dudhia, partner at East Midlands law firm Nelsons, discusses the regional trends he has picked up on and where he believes the potential lies.
“Over recent weeks our team has been keeping a close eye on the Wilko situation – we saw how rapidly things escalated and the turbulence that resulted in a failed rescue for the chain. “I think the whole Wilko story is quite indicative of the general economy – we've lost a major household name within a high street setup.
It’s never a positive thing to see a business like that effectively disappear, and perhaps it’s all made us more aware of what we take for granted in our communities.
It has undoubtedly put some negative vibes out there, however the news that Poundland and B&M would be taking over stores, as well as The Range purchasing the brand name, shows there are still investment opportunities.
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And looking at the transactions we have covered in the past year or so shows that there are certain corners of retail showing promising signs of progress.
One area that appears to be having enormous success is the pre-loved market.
Recycled fashion retailer White Rose is a client we have worked closely with for a few years, supporting them with store openings in Nottingham, Derby and Leicester as well as further afield.
Since it started in 2009, it has grown to 15 stores including one outlet and one shopping centre unit.
There is undoubtedly a huge demand for this type of shopping experience, which takes the charity shop model one step further and offers a bespoke experience with handpicked items tailored to the latest trends.
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It’s also an incredible way to boost sustainability in our city centres, and during a cost of living crisis it is providing items at fair and affordable prices.
The failing high streets have not deterred retailers such as this, and a quick glimpse around most city centres shows there are also multiple other vintage and second-hand stores seemingly doing well and opening more premises.
In a similar vein, there is an indication that specialist stores are thriving too.
It’s been great to see the expansion of Nottingham-founded Universal Works, which now has three standalone stores and two partnership stores, showing the appetite for a traditional retail experience.
Nelsons secured the transaction for it in a prime shopping street, as well as a unique space in London’s trendy Soho.
The aesthetic of the units, much like the clothes, is a huge draw for its customers that helps to elevate the experience for shoppers.
It was refreshing too, to see one of our team’s longstanding clients Black Butterfly Tailoring appoint Nelsons to support with the relocation to a larger, more prominent premises – another example of a specialist area of retail that has seen success, enough to need to upscale.
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Something else that has caught our attention, has been the online retail market.
We have advised clients looking to purchase storage units, with the ambition to sublicense these sites to small businesses for Amazon shops and various other e-commerce set ups.
The reseller and drop shipping industry picked up in the pandemic when people had more time on their hands to set up these ‘side hustles’.
Now with the cost of living crisis also, people are looking for extra income but don’t want to make a long-term business commitment.
While this is a niche area for our commercial property department, it is still indicative of the types of trends within retail and how the market has adapted to the economic climate of the last few years.
While there have been some positive signs in this sector, the appetite for retail property investment has definitely cooled down and this has had a knock-on effect in our cities.
And with the market still so volatile, investors are understandably looking for safer options.
Just looking around it is clear there are more empty units and a scattering of offices – in the East Midlands there seems to be a saturation of residential accommodation in their place.
This happened prior to the pandemic but then accelerated in its wake.
In many ways it feels like we could be at the beginning of a retail evolution; the traditional city centre could look very different in a few years’ time if these trends continue.
In terms of retail property, I think there is a feeling of ‘if you build it, they will come’.
The key is to have attractive prospects – commercial decisions are often based on confidence for both consumers and investors.
Streets with empty units are understandably harder to turn around and often create a knock-on negative effect.
It’s important to push against that through clear strategies, which is where local authorities have a big role to play too - sharing opportunities, boosting the city centres and encouraging new ideas and growth.”