Oxford Street rents

[Austin Prefect]

I see HMV is closing their Oxford street store due to a massive rent increase. Who will the landlords be expecting to rent to? Another candy store? It's a bit big for a coffee shop.

[vixen1700]

Saw this on the news last night and it made me curious:

HMV s flagship shop at 363 Oxford Street, London, was previously reported to pay around £3.2 million a year in rent. However, the landlord has now proposed doubling the rent, which could bring it to approximately £6.4 million a year.

[J4CKO]

Thats a lot of posters and CD's !

Sometimes you do wonder about the economics, went into a very posh handbag with the Mrs in London, she did buy one but we were there over an hour (FML etc) and it was all very fancy but she was the only one in there, must have been eight different staff I saw in there, must have to sell more than one handbag a day ?

[Terminator X]

Given high streets are dying you'd have thought the landlords / LA's would see some sense.

Perhaps a massive vape shop instead or Turkish Barbers

TX.

[TUS373]

It is GREED. There is a culture of continually pushing ever increasing costs onto businesses and customers. Well dobe to HMV for not giving in.

[Austin Prefect]

J4CKO said:

Thats a lot of posters and CD's !

Sometimes you do wonder about the economics, went into a very posh handbag with the Mrs in London, she did buy one but we were there over an hour (FML etc) and it was all very fancy but she was the only one in there, must have been eight different staff I saw in there, must have to sell more than one handbag a day ?

I once worked for a very high end retailer that, among other shops and concessions, had a small shop in Paris with just one member of staff at a time. It turned out that one of the staff on the rota was somehow pocketing payments (not sure how she managed it with credit cards but she did). There were no sales recorded when she was on duty, but it took a while for anyone to notice the pattern because zero sales days weren't uncommon.. When you're selling goods for 4 and 5 figure sums with a margin upwards of 50% you don't need to sell much volume.

[isaldiri]

TUS373 said:

It is GREED. There is a culture of continually pushing ever increasing costs onto businesses and customers. Well dobe to HMV for not giving in.

it's called capitalism. if the landlord thinks someone else will pay what they are asking, good for them too.

[StevieBee]

isaldiri said:

TUS373 said:

It is GREED. There is a culture of continually pushing ever increasing costs onto businesses and customers. Well dobe to HMV for not giving in.

it's called capitalism. if the landlord thinks someone else will pay what they are asking, good for them too.

At this level, there's no thinking involved - they'll have someone lined up ready to pay the higher rent.

[Downward]

Can’t imagine why landlords want people back in the offices down in old London.

[.:ian:.]

Terminator X said:

Given high streets are dying you'd have thought the landlords / LA's would see some sense.

Perhaps a massive vape shop instead or Turkish Barbers

TX.

I wonder what the business rates on the property are, probably also eye-watering. If the landlord cant find a new resident soon, they will be on the hook for that.

[Type R Tom]

Putting the planned closure of Oxford Street back probably didn't help.

Sooner it's shut to traffic the better. Never ceases to amaze me how many European cities have car free areas compared to London

[Austin Prefect]

StevieBee said:

isaldiri said:

TUS373 said:

It is GREED. There is a culture of continually pushing ever increasing costs onto businesses and customers. Well dobe to HMV for not giving in.

it's called capitalism. if the landlord thinks someone else will pay what they are asking, good for them too.

At this level, there's no thinking involved - they'll have someone lined up ready to pay the higher rent.

Well yes, but who?

[simonrockman]

Oxford Street is just about to be fully pedestrianised. You can't sell enough to people if this is done.

My parents had a small shop, it's greatest asset was free parking outside. We sold kites and fireworks. People who came to visit other shops in the parade would wander in out of curiosity. If they had been to the motor factors or suit shop, they could put what they had put in the boot of their car and then come in and buy stuff from us. If they came by public transport they would wander in holding their purchases from the other shops, chat for a bit and promis to come back. Few did.

Oxford street can't make economic sense if people can only shop in one place at a time. You need to be able to drive in. Park, take what you buy to the car and then go to another shop. Tottenham Court Road used to be the place to buy hi-fi and televisions. You can't do that now.

The war on the car is more responsible for killing retail than online sales are. The combination of the two, where people brows in a shop and then buy online means that only major chains can survive.

Even then it's tough. A major fashion retailer told me that people would buy multiple sizes online, keep the size that fitted and then take the other back to one of his shops. He said that you could end a week with a branch having more stock that it started with and it would be all the unwanted sizes.

[vixen1700]

Interesting about Tottenham Court Road and hi-fi shops, there used to be so many and now there are none.

[Type R Tom]

simonrockman said:

Oxford Street is just about to be fully pedestrianised. You can't sell enough to people if this is done.

My parents had a small shop, it's greatest asset was free parking outside. We sold kites and fireworks. People who came to visit other shops in the parade would wander in out of curiosity. If they had been to the motor factors or suit shop, they could put what they had put in the boot of their car and then come in and buy stuff from us. If they came by public transport they would wander in holding their purchases from the other shops, chat for a bit and promis to come back. Few did.

Oxford street can't make economic sense if people can only shop in one place at a time. You need to be able to drive in. Park, take what you buy to the car and then go to another shop. Tottenham Court Road used to be the place to buy hi-fi and televisions. You can't do that now.

The war on the car is more responsible for killing retail than online sales are. The combination of the two, where people brows in a shop and then buy online means that only major chains can survive.

Even then it's tough. A major fashion retailer told me that people would buy multiple sizes online, keep the size that fitted and then take the other back to one of his shops. He said that you could end a week with a branch having more stock that it started with and it would be all the unwanted sizes.

This is an insane take - there hasn't been on street parking of that nature on Oxford Street for decades.

[Miocene]

J4CKO said:

Thats a lot of posters and CD's !

Sometimes you do wonder about the economics, went into a very posh handbag with the Mrs in London, she did buy one but we were there over an hour (FML etc) and it was all very fancy but she was the only one in there, must have been eight different staff I saw in there, must have to sell more than one handbag a day ?

I presume it's still the case that some of these shops are loss leaders. The big brands need to be seen to have a physical shop in London / Paris / New York / Peckham etc

[Chrisgr31]

.:ian:. said:

I wonder what the business rates on the property are, probably also eye-watering. If the landlord cant find a new resident soon, they will be on the hook for that.

If the rest of the story is true they are too low. The rateable value is meant to represent the rental value as at 1 April 2024. If the rent really was £3.2m and doubling you’d expect a rateable value between those 2 figures.

In reality the rateable value appears to be £1,420,000 giving a rates payable of £764,000 about half the level the rent suggests.

They haven’t been open in this location long which raises the question how long their lease is and whether they will walk away from a unit they presumably spent a lot on fitting out.

I’d guess this is really a public preemptive strike against a landlord proposing a large increase in rent at rent review which may or may not be justified. Depends what rents everyone else is paying.

[vikingaero]

The average American Candy Store doesn't pay rates and neither will the Landlords if they are smart about an empty unit (think lots of shell overseas limited companies and nominee directors and secretaries).

Back in 2007 my Dad rented a shop for a fixed 3 year lease whilst he got a warehouse sorted out. No extensions, no renewals, just a fixed in/out term. Once he left he still got business rates demand from the Local Authority. We informed the LA who backed off. Then in 2023 he got more business rates because the Landlord would just nominate him to get the LA off their backs.

[Randy Winkman]

simonrockman said:

Oxford Street is just about to be fully pedestrianised. You can't sell enough to people if this is done.

My parents had a small shop, it's greatest asset was free parking outside. We sold kites and fireworks. People who came to visit other shops in the parade would wander in out of curiosity. If they had been to the motor factors or suit shop, they could put what they had put in the boot of their car and then come in and buy stuff from us. If they came by public transport they would wander in holding their purchases from the other shops, chat for a bit and promis to come back. Few did.

Oxford street can't make economic sense if people can only shop in one place at a time. You need to be able to drive in. Park, take what you buy to the car and then go to another shop. Tottenham Court Road used to be the place to buy hi-fi and televisions. You can't do that now.

The war on the car is more responsible for killing retail than online sales are. The combination of the two, where people brows in a shop and then buy online means that only major chains can survive.

Even then it's tough. A major fashion retailer told me that people would buy multiple sizes online, keep the size that fitted and then take the other back to one of his shops. He said that you could end a week with a branch having more stock that it started with and it would be all the unwanted sizes.

I'm 61 and have always lived in the London suburbs and worked in central London. I'd be surprised if there are very many people at all that have ever expected to drive up and down Oxford Street visiting shops. That sounds completely weird to me.

[sparta6]

Type R Tom said:

Putting the planned closure of Oxford Street back probably didn't help.

Sooner it's shut to traffic the better. Never ceases to amaze me how many European cities have car free areas compared to London

Lots of areas have been pedestrianised.

The irony is e-scooters are more of a liability to pedestrians than cars ever were. Cars generally didn't drive along pavements, piazza's or alleyways.