With Debenhams going into liquidation and Arcadia going under, the Government not only needs to step in and support staff from both those businesses but come up with a plan help retail property owners, and to save what it can of the British High Street.
Retail property owners have been amongst those hit hardest by the pandemic as retail and hospitality businesses have been unable to pay their rents. The collapse of Arcadia and Debenhams will further add to landlords’ woes throughout the retail world including those that own high end stores, concessions in shopping centres or high street properties.
There is a real risk that landlords are next on the list to be in serious trouble. The Government needs to step-in to stop the domino effect and prevent these landlords from being the next to go under. Landlords are faced with the scary proposition of continuing to have no income for the foreseeable future.
Costs on empty retail properties continue to be high with little prospect of new tenants coming in. Landlords are being crippled by councils refusing to enter negotiations about the payment of rates. Those landlords who are highly leveraged will be particularly impacted and need a solution.
Whilst the Government has taken steps to ease the planning rules to help landlords to change the use of their properties, landlords’ reserves have been depleted by the pandemic.
With more retailers likely to follow Arcadia’s demise in the new year, Government needs to put in place an action plan immediately. A fund needs to be provided to enable landlords to service their debt and to reposition their assets. Such a fund should also be assessable for small businesses to fit-out new premises.
Without intervention, there is no money for the regeneration of the High Street to obtain a positive result for landlords, their banks and for the High Street itself.
If no solution is provided to landlords, then the domino effect will continue.