The Landlord dilemma

Can a managed outcome deliver a better High Street?

The Americans are coming. Or rather, some substandard versions of their confectionary are coming.

This is leafy Henley on Thames, thronging with weekend visitors, regatta-goers, river enthusiasts and London-dwellers seeking some nearby countryside. Henley was also home, until recently, to an M&Co which sadly went through the now all-to-frequent retail administration process and left the site vacant.

The freehold of the property changed hands and the new landlord presumably has aspirations to do something creative with the site. But in the meantime, we have this - the scourge of Oxford St, the American Candy store (which also sells vape, will repair your mobile phone and no doubt more).

If you follow retail news closely (or, frankly, have just visited Oxford St in London at any point recently) you’ll be familiar with stories like this one from Retail Gazette highlighting the rash of these American Candy stores which spread like a plague across the western end of what used to be the UK’s premier shopping street over the last year or so.

In response to some legal and law-enforcement intervention, the number of American Candy stores on Oxford St appears to be falling, but not only has this one popped up in Henley but a search of other local press stories reveals a similar pattern - the ‘brand’ having been ousted from Oxford St appears to be spreading out across the country instead.

I say ‘brand’ in those quote marks because it isn’t entirely obvious what these stores are. They don’t appear to be under common ownership and a series of press reports have highlighted some disturbing business practices including a fairly casual relationship with the tax authorities.

Moving Tribes is not a law firm, and I’m sure some of these businesses are genuinely trying to make a living from the unique combination of selling odd flavours of sweets and also repairing mobile phones, but at the very least it is clear that these are stores which pop up when sites are vacant and landlords in need of a quick tenant.

Why should we be concerned about that?

With the demise of Wilko (now sadly looking like being almost total) and the many other retail chain failures and shrinkages we have seen this year, there are going to be a lot of vacant shops into which these kind of businesses may pop.

And whilst a High Street full of vape shops, betting shops, charity shops, candy sellers and mobile phone repairers may be fractionally better than a street full of empty premises, it is certainly not the vibrant collection of independent and national chain retailers that will sustain a local economy or provide much value to local residents.

And that leads us to the landlord conundrum. If I own the freehold to a retail premises, I probably just want it to be full. I’ll take a tenant who looks like they will pay, and if I can’t take a tenant on a long term basis then I guess I’ll take one on a short term lease as a gap-filler.

But for a town, the cumulative result of all of those individual and probably perfectly commercially sensible decisions by private landlords can add up to a retail offering which is unbalanced and just wrong for the area.

An instructive comparison is with a shopping centre, which is effectively a large retail space with a single landlord. There, the landlord (the centre operator) will agonise about which retailers it wants in its space, and will also carefully curate which ones are in which units to create an overall space which is as attractive to visitors as possible and which encourages them to part with as much money as possible.

In a town or city with a disparate set of private landlords, some of whom will be distant pension funds or even based overseas, that kind of coordinated outcome is much more difficult to create.

And the result speaks for itself - confusing and poorly organised retail streets and the explosion of candy stores and vape shops.

What’s the solution? Perhaps that is an opportunity for the Royal Commission on High Streets that Sharon White of John Lewis has called for this week.

Certainly, the challenge is a complex one, involving the rights and obligations of landlords, the nature of the planning and zoning powers of local authorities and the active involvement of retailers and communities.

Across the country, there are towns doing a terrific job of bringing these constituencies together to create a better outcome. Follow some of the place-makers and retail consultants on social media to see some great examples.

But whether that ‘effort of will’ can withstand the current economic conditions and the wave of American Candy stores heading its way remains to be seen. It may well be that more fundamental change is required if we are to get and keep the High Streets we want.

What do you think? Is fundamental change required in order to deliver better High Streets and if so what kind? What would your brief to a Royal Commission be? Do share your views.