News that Sports Direct has bought the Brookfield Shopping Park in Cheshunt, Hertfordshire raises an interesting idea : if brands feel they do not have enough control over access to the customer, then they can always turn gamekeeper.
Mike Ashley’s decision to pay £25.4m for a site that was bought in 2015 for £62.2m is clearly sound business sense, and he may just leave it at that, but given the number of brands he has acquired recently, he will want to make the retailing of this diverse bunch easier. Acquiring a ready made site is a perfect way to do that.
And he will be in good company in terms of footfall; Next, New Look, River Island and Clarks are already tenants. In fact, Sports Direct has said that the park will see new investment in the form of a Sports Direct, USC and Flannels outlet.
Given upwards only rents and the traditional unwillingness of landlords to negotiate until they are hit in the face with a CVA Voluntary insolvency), we can expect to see more deals where the retailers and brands pay upfront to get control.
This will also make the retailers into landlords, not a role they will particularly enjoy as they have the play the villain and demand quarter rents on December 31st each year, but let’s look on the bright side and welcome innovation into stores and retail parks in the form of more leisure and hospitality.
Landlords have moved a bit. In the US, they are talking about lending money to struggling tenants. And we will certainly see more creative deals where both parties are suffering from the change in store numbers.