As retailers fall under increasing pressure due to shifting behaviours and COVID-19 restrictions, the high street continues to feel the impact, with major names disappearing one by one.
Following the collapse of Arcadia last November, ASOS bought the prized Arcadia Topshop, Topman and Miss Selfridge brands, as well as athleisure brand HIIT, for £330 million earlier this month.
Now that online-retailer Boohoo has scooped up Debenhams and the remnants of Arcadia’s brands (Dorothy Perkins, Wallis and Burton) for £25.2 million, what does this mean for the future of UK retail?
What's next for the physical stores?
Empty stores present an opportunity for junior brands to grow. No landlord wants an empty property, so these brands are now better positioned to begin negotiations and set up shop, possibly securing good deals on retail premises.
Individual buildings could also change from commercial to residential use, thanks to relaxations in the planning system. These retail spaces could become an alternative for affordable housing in inner-city locations.
How will this impact high streets?
It may be time to totally rethink high streets across the country. Turning commercial properties into residential homes has plenty of advocates, and while there is still hope that consumer behaviour will return to pre-COVID levels eventually, the bottom line is that the high street may look very different post-lockdown.
Our blog on the role landlords can play in the future of the high street looks at how the improvement of landlord-tenant relationships can provide a light at the end of the tunnel.
What about those losing their jobs?
The fate of these stores’ employees is yet to be decided, with no guarantees for jobs to be transferred. While some employees may be diverted into online sales, there are still thousands of roles at stake.
If redundancies happen, it’s vital that the correct processes are followed. Employees must be told what payments they will receive regarding notice entitlement, holiday pay, and statutory redundancy pay (where an employee has two or more years' service.)
How will it change these high street names?
ASOS and Boohoo clearly see the value that the Debenhams and Arcadia brands hold and will be keen to expose customers to a new purchasing experience. Online retail is taking the spotlight, and younger audiences are a crucial market that these classic names could now be opened up to more successfully.
The pandemic has unsurprisingly altered our shopping habits, with online retail increasing exponentially. However, this trend was already taking hold even before COVID-19. As such, the time has come to increase innovation and look for new operating models, to avoid further stress.
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