General enquiries :
+44 (0)20 7602 6000

HOUSE OF FRASER - WHAT NEXT FOR OUR LANDLORDS?

Friday 15 June 2018 Catchment AnalysisCustomer ExperienceData Insight & Analytics

Joe Oxley's picture
By Joe Oxley

Since the news broke last week, much has been made of House of Fraser’s plans to close 31 stores across the UK. While the debate around the merits of the CVA process and the validity of the decisions made by House of Fraser will likely rumble on for some time, here at CACI we have turned our attention to the potential consequences for landlords.

As a starting point, our Retail Footprint catchment model shows that House of Fraser has generally chosen to close stores in smaller centres. In terms of market size, retail centres with planned closures are, on average, two thirds the size of the centres they have opted to stay in. London’s West End and Birmingham are obvious exceptions to this rule, perhaps reflecting the level of (department store) competition they face in those locations.

But what does this mean for the centres concerned moving forward? If a landlord is to pursue a like-for-like replacement in the form of other premium brands (e.g. current House of Fraser concessions), an affluent customer base across the centre’s catchment is essential. Interestingly, the centres with planned closures actually provide greater penetration with these wealthier shoppers; strengthening the case for their landlords to do just that. 

A centre’s mix and shopper engagement must be key considerations for landlords to ensure that they safeguard these high-spending trips

And what about centre dynamics – what does House of Fraser bring to the table beyond rental income? Shopper Dimensions, our database of over 615,000 consumer interviews across 230 UK retail locations shows how shoppers interact with a retail destination. Across all asset classes, we see that the House of Fraser visitor is well-engaged with the wider centre. In comparison to the average shopper at that centre, they: stay for longer (+22%), visit more stores (+40%) and spend more on both retail (+31%) and food and beverage (+7%). A centre’s mix and shopper engagement must be key considerations for landlords to ensure that they safeguard these high-spending, Big Day Out style trips.

While there will undoubtedly be some short-term headaches following any store closures, it does present landlords with considerable opportunity to re-invigorate and diversify their centre’s mix. The use of former BHS space provides some good examples of pro-active asset management; the Oxford Street store is now home to Swingers Crazy Golf while Decathlon have taken some of the former department store’s space at intu Uxbridge.

Store closures present landlords with considerable oppertunity to re-invigorate and diversify

CACI can help with all aspects of this process, from initial impact assessment through to development forecasting and leasing support. Please contact us to discuss any of this in more detail. 

If you're interested in how UK consumers have been changing, check out our report on the Evolution of Retail.

Further Information

If you want to hear more about how CACI's Property expertise can help you, get in contact now

Since the news broke last week, much has been made of House of Fraser’s plans to close 31 stores across the UK. While the debate around the merits of the CVA process and the validity of the decisions made by House of Fraser will likely rumble on for some time, here at CACI we have turned our attention to the potential consequences for landlords.

HOUSE OF FRASER - WHAT NEXT FOR OUR LANDLORDS?