Displaying items by tag: Physical Retail

Tuesday, 16 April 2019 11:08

ChicGeek Comment Big Shops Flop?

big shops primark BirminghamThe simple narrative of big shops are dying, department stores are dinosaurs and physical retail is on its knees just doesn’t ring true. Primark is bucking the trend, and, to really the ram the point home, has just opened not only the world’s biggest Primark in Birmingham, but also officially the largest fashion retail store in the world according to the Guinness World Records. Move over Topshop!

Spread over 5 floors, and 160,100 sq ft in size, the new store boasts womenswear, menswear, kidswear and homeware, plus the largest ever Duck & Dry beauty studio, the first in-store barbers salon from Joe Mills, and 3 dining experiences, including a Disney Café. If it sold washing machines it would be classed as a department store.

Left - Primark's new Birmingham mega-sized store

While nobody seems to know what is going on at Debenhams, and Mike Ashley is hoovering up brands like a hyperactive Dyson - we’re still not sure what he is going to do with all these companies - Primark is an illustration of very large physical stores still opening and doing well.

With no e-tail presence, Primark is where all the other department stores’ physical customers have gone, not to mention Marks & Spencer’s and Next’s. Primark’s Adjusted Operating Profit was £843m in 2018, with revenue of £7.477b, up from £7.053b the year before.

According to local press, Birmingham Mail, “The new Primark megastore Birmingham has been jam packed for four days in a row. Crowds of people flooded into the 160,000 square foot shopopolis when Primark opened its doors 15 minutes early at 9.45am on Thursday, April 11. Ever since our live Primark updates began, the five-floor giant has been packed from the basement to the roof with shoppers - and diners - keen to see what all the fuss is about.”

Primark needs large stores to make its business model of pile-it-high-and-sell-it-cheap work. Only this week, another Primark opens in Milton Keynes. centre:mk see its new 75,000 sq ft store open in the heart of the shopping centre and is the largest new store to open in centre:mk in the last 25 years. Over 3 floors, Primark was the most requested brand by the centre’s 25 million visitors in exit surveys over a number of years.

Kevin Duffy, Centre Director at centre:mk, said “We are thrilled to announce that Primark will be open on the 16th April and joining our fantastic selection of fashion and beauty brands at centre:mk. This is a key moment for us – the new flagship store will be the single biggest store since we introduced Marks & Spencer to centre:mk nearly 25 years ago. Primark is a firm fashion favourite, and so we look forward to attracting more visitors by expanding the centre’s fashion retail mix.”

Primark are expanding into Slovenia, this year, and continuing to grow in America. Primark currently has 9 US stores clustered in the north eastern corner, but plan to open a store in Florida in late 2019. While its expansion has been slow and steady, it was ranked in the top spot on a list of the 100 fastest-growing retailers in America by the National Retail Federation's Stores magazine, which used sales data from Kantar Consulting. In the US, specifically, Primark sales were up 103% year-on-year.

big shops primark Birmingham

Urban Outfitters is another brand looking to expand with larger stores. Planning to open 15-20 new stores annually for the next five years, the US-based retailer has 50 stores in Europe, including 28 in the UK and Ireland. Emma Wisden, European Managing Director, said the retailer has identified several key markets of interest within Europe that it is underexposed in, which it will be pursuing imminently. Speaking to Drapers, she said, “Urban Outfitters is in the fortunate position of being one of the ‘disruptor’ brands in fashion at the moment. We are opening stores, not closing them, unlike so many of our neighbours on the high street. Ecommerce is, of course, increasingly important, so it is crucial to constantly evolve omnichannel shopping. However, bricks-and-mortar retailing isn’t going anywhere soon.”

Right - Primark's Duck & Dry Beauty Studio in Birmingham

Urban Outfitters has increased its European store portfolio by more than 30% over the past 12 months with new stores in Vienna, Milan, Paris, Eilat and Düsseldorf.

These two retailers illustrate the polarisation of physical retail. Bad, boring retail is dead, and while people are attracted to Primark for the prices, by adding hairdressers and restaurants, they are giving people more reasons to visit and stay longer. Primark’s phenomenal success is allowing them to think beyond cheap clothes and their tie-ups with Harry Potter and Disney at pocket money prices is a guaranteed success. 

Urban Outfitters is clearly riding the retro, sportswear trend, but being a shop of discovery and fresh ideas and brands allows a chance for constant change if the buy is right.

Many retailers with large stores are finding it hard to balance business rates, rents and falling footfall, but Primark and Urban Outfitters are proving, clearly, that people still want to leave the house. 

Published in Fashion
Friday, 02 March 2018 16:21

ChicGeek Comment The Big Retail Tipping Point

New Look Bankruptcy death of big retail

News on the grapevine New Look is close to going under. I don’t think this will mean that New Look will disappear, it’ll probably be pre-packed into a slimmer and more nimble retailer while shaking off its debt. It has 600 stores, which seems rather top heavy in this current retail environment.

Ironically, when it’s not cold enough many retailers blame the weather for not shifting clothes, and this week, the whole week, or even two, will be a write off, for the majority of retailers, particularly fashion, because people aren’t leaving the house or simply can’t get to the shops due to the snow and many items there won’t be suitable anyway. Two disruptive weeks could push a few more retailers over that administration edge.

Left - Expect to see more of these and for longer

I think we’re at a tipping point for physical retail, particularly larger shops with big overheads. These gaps are big and aren’t being filled. 102 of the 164 BHS stores that went out of business are still un-let nearly 2 years after its closure. Add in Toy R Us and the announced store closures from many retailers such as Marks & Spencer and Debenhams and you have a very gappy and unattractive grimace to the majority of shopping areas or high-streets.

This downward spiral simply speeds up the death of these areas: fewer shops, means fewer visitors and therefore fewer shops.

Any retailers who sell the same items as Amazon seem to be in trouble and fashion has to acknowledge that the ASOSs and Boohoos of this world have taken a massive chunk of spend and continue to do so. 

Fashion retailers are damned if they do and damned if they don’t when it comes to the internet. Even the best website in the world will still eat into physical stores. The bigger and better you make your online offering will only encourage people not to visit your stores. It’s a feeling of struggling to stand still, and, with many cases, going backwards.

I live in Croydon and there’s been talk of a big, new Westfield for a long time. The town centre is very dated and run down and needs the investment and also the ‘Westfield’ name to put it back on the map. But, Westfield has gone very quiet. They’ve kicked the development back to start in 2019, not really sure why, and having just been taken over by a French company it wouldn’t surprise me if they wanted to relook at any new developments.

Croydon is a risk. It isn’t White City. While it has good transport links, it also has many shopping centres close by. I’ve said to people buying into ‘up and coming’ Croydon, not to buy thinking a Westfield is definitely coming. John Lewis was always muted as an anchor tenant and they’ve said they don’t want to open anymore stores ATM. If it does happen, it will affect the Bromley, Kingston, Bluewater and even Brighton shopping centres. The pain will be felt somewhere.

So, what to do? These units are too big. Shops and shopping centres will have to contract. These spaces need redesigning and dividing. What we need is housing and leisure facilities. The future of physical retail will be ‘want’ and not ‘need’. It’ll will be about service and human interaction - Read TheChicGeek's Human Cookies. Online is unbeatable with need, and its dominance will speed up even more with automation and driverless delivery. But, we’ll still want to get out of the house, see what’s new, try and touch things. It’s just unfortunate that some of these larger retailers and their footprints are unsustainable.

Published in Fashion

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