Retail Gazette quoted some very
heavyweight financiers – APAM Asset
Management. They reckoned that
there were as many as 200 – yes, two
hundred - shopping centres that were
financially on the edge of business
existence.
Asset management firm APAM
estimates that hundreds of shopping
centres worth around £7 billion are in
danger of breaching debt covenants.
This number has reportedly increased
by 75 per cent since last year, as
falling market values and increasing
numbers of CVAs butcher the sector.
Retail Gazette reported that APAM’s
executive director Simon Cooke
said this was in part due to lack
of reinvestment by private equity
owners, with the average shopping
centre in the UK having changed
hands or been refinanced three-and-
a-half years ago.
The BBC News report quoted Retail
Gazette and also added in its own
experts.
Mr Nelson Blackley, from the National
Retail Research Knowledge Exchange
Centre, said the growth of online
retail in the UK - on sites such as
Amazon - had been faster than in
almost any other retail market in the
world. The demise of "major anchor
stores" like BHS and Toys R Us and
the rise of online shopping has caused
a "downward spiral", said Mr Nelson
Blackley.
"If the major anchor store moves out,
that has a halo effect on other stores
in that centre. It's a downward spiral
and you can't fill shopping centres
with nail bars and vape shops." Mr
Blackley, who is based at Nottingham
Trent University's Nottingham
Business School, pointed to research
in the Financial Times that suggested
about £2.5bn worth of shopping
centres and retail parks are up for sale
in towns and cities across the UK.
Some of this marketing is unofficial
and not in the public domain," he said.
"It's a trend that's moving very
quickly. You don't necessarily want to
be in the business of owning shopping
centres at the moment.” No kidding
Mr Blackley…….
A prominent and nationally operating
installer friend of mine put it this
way in nicely earthy language, “I
am not that old, but I remember
Woolworths going out of business
in the late 90s and look recently at
BHS and the House of Fraser going
down the plughole - massive names
in retailing. As an installer I am so
alive to the change in my customers
buying habits. You don’t a PhD in
‘The Blindingly Obvious’ to realise
the game has changed. I think it is a
matter of concentrating on the ‘new’
and not wasting time on the old ways.
They are gone.”
We made our own decisions several
years ago. Then, about 30% of
our total sales were through the
distribution route to market.
63
That is now around 15% and that
is with distributors which are
geographically and strategically
placed to deliver - direct to the
installer.
It is not difficult to envisage that with
just a few years that the big brand
names will be aiming everything
they’ve got direct to the end-user/
consumer. But it may well be at the
expense of the installer, who may well
have to work on an iron-clad fixed
price basis which may not be the true
value of the job.
We have chosen our route many years
ago and have continued during all
those years to fully and total commit
to the installer as our partner – we
have stayed connected. Others may
try to ‘re-connect.’
But it is the installer that is our future
and we see nothing on the horizon
likely to change that – after all, all
gas fired products must, by law, be
installed by a fully qualified Gas Safe
person. And that means that the
individual must have a high level
of expertise and ‘Yes’, we deal with
specification and consultants, but
that is inevitable on commercial sites
which require design and engineering
services. engineering savvy…. which is
what installers have….
And one final thought - maybe there
are even more changes on their way,
this time in the manufacturing arena?
For more details on RINNAI
products visit www.rinnaiuk.com