The trouble with retail is we have become accustomed to reading gloomy headlines about big-name stores scaling back or closing down completely.
Marks & Spencer, House of Fraser and Debenhams, national treasures for many shoppers in the UK, have recently announced they are shutting branches all over the country. In the US, even the iconic Macy’s is cherrypicking which of its stores to keep open. Other well-known brand names, such as Toys R Us, are disappearing completely.
On both sides of the Atlantic, a trip to many a suburban high street or mall can be a depressing experience with boarded-up store fronts and closing down signs an all too common sight. One wonders whether there will be any left to visit soon. Simply, we have become hardwired into associating retail with failure. But we are being blindsided.
Among the negative rhetoric, there is a positive, though complex, tale. One of a sector in transition, modernizing and repositioning for a new age of retail involving more online shopping and catering to new consumer habits. This does not mean the physical store is destined for the morgue. In the words of Unibail-Rodamco’s CEO Christophe Cuvillier in a recent interview, only “boring retail is dying.”
To survive, traditional retailers will need to think creatively about their offering and use of space to attract customers and investment. And there are examples throughout this report of many doing just that: omni-channeling, experiential shopping, pop-up stores, flexible leasing structures and carefully selecting locations of stores, to name a few.
For real estate managers and institutional investors, it is more important than ever to analyze the underlying mega-trends and consumer behavior patterns driving the retail revolution. This will be key to finding assets that can deliver long-term value-add performance. Not an easy task, and not without risk, in a sector in the midst of change.
Enjoy the report
Helen Lewer
Special Projects Editor
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