Over half of BHS stores still empty as landlords struggle to attract occupiers
It has been two years since BHS collapsed with a loss of 11,000 jobs yet more than half of the retailer’s former stores are still lying empty. The data, part of a new report by the Local Data Company, reveals the current state of the UK retail industry.
Just 42.1% of BHS’ ex stores are occupied or have deals in place, while 52.8% are still empty. The remaining 5.1% have been demolished, split or merged into existing stores to expand floorspace, the latest LDC data revealed.
Primark has taken the most BHS stores, as their large size fits well with the Irish value retailer’s business model.
However, this number just reaches seven, including some units which have been used to expand an existing store or for temporary accommodation during refurbishment.
The most common use of space has been brands taking units to open dual fascia stores, like Next opening with a Next Home or Lipsy, and Sports Direct opening with USC and Flannels concessions.
Meanwhile, other brands have moved into former BHS spaces which have been previously reformatted into smaller units, such as Joules and Smiggle which opened in a reformatted store in Peterborough.
As UK retailers continue to navigate the changes in the industry, many businesses might be reluctant to invest in large format stores until there is more certainty about where online and offline shopping are heading.
“Retail is experiencing its fair share of challenges with dust not yet settling on the House of Fraser administration and its subsequent acquisition by Mike Ashley. Two years on from the closure of the last BHS store, just over half of stores still remain vacant. This is indicative of the challenge landlords will face over the next 12 to 18 months as more department stores close,” said senior insight analyst Ronald Nyakairu.
“However, research has shown that with skilful asset management, landlords can find new uses for these properties. Many of the store owners have either reformatted the stores to create smaller units for expanding fashion chains like Joules and Uniqlo, or targeted occupiers that can utilise the extra floorspace to add concessions like coffee shops or sister brands such as Next opening Lipsy and Next Home. Looking forward the challenge will remain as the list of occupiers who are both looking to expand, and who don't already have a presence in the towns set to see closures is not limitless.”
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