Yahoo Finance Goodbye Topshop, hello Ikea: How London’s Oxford Street transformed in 2021
Retailers on Oxford Street were hoping for a much-needed Christmas present in the form of strong festive sales. Instead, they were left bitterly disappointed this December.
The introduction of new ‘Plan B’ rules has dented footfall at a time when the West End would usually have been buzzing. The restrictions, which include work from home guidance, add to the long list of woes for retailers over the last 12 months. Perhaps the clearest signs of these pressures can be seen on Oxford Street, the central London shopping street that stretches for more than a mile in length.
“Oxford Street has been forever changed by the closure, or in some cases, downsizing of long-standing department stores,” says Emily Stella, lead retail analyst at analytics company GlobalData, says.
Some huge sites now sit vacant, with brands such as Topshop shutting. But despite these headwinds, new research shows Oxford Street fared better during the pandemic than a number of other well-known retail destinations.
Here we look at some of the brands that have, or will, exit Oxford Street — and the others that are moving in.
EMPTY SPACES
Retail property agent HDH calculates around 28 tenants exited Oxford Street in 2021. Sites that were already vacant at the start of the year included the New Look store and Debenhams (which later went on to exit all of its UK branches).
Trophy stores that shut over the last 12 months include the Topshop flagship by Oxford Circus station. Prior to lockdown, the 100,000 square feet store welcomed 400,000 customers through its doors each week. The fashion chain left the huge shop vacant afters its parent company, Sir Philip Green’s Arcadia, went into administration in late 2020.
Other major brands are on the way out. House of Fraser’s Oxford Street department store is set to close in January 2022 after over 100 years at the site. A new redevelopment is planned, but the loss of such a well-known name on Oxford Street will be sad for some.
Firms with physical stores were already facing difficulties before the coronavirus outbreak, with rising competition from online rivals and high business rate bills in the capital.
House of Fraser’s parent company hit out at property taxes when it announced the planned Oxford Street closure. A Frasers Group spokesman said at the time: “As a business, who is continuing to invest significantly into the British high street, we feel it’s only fair to recognise and request an urgent review of the current archaic business rates, which continue to be astonishingly outdated.”
MOVING IN
It’s not all one way traffic though. Property agent HDH’s chief executive James Ebel says: “There is still an appetite for international expansion and Oxford Street will always suit certain retailers.”
In some cases rents have been reduced, making the proposition of opening “more interesting”.
Ebel says: “Yes, it is looking sad as we see it today, but I have no doubt Oxford Street will return to the top.”
His firm says more than 20 new stores opened on the street in 2021, but a number of them were not household brand names. Many were luggage, sweet and mobile phone shops, not all of them the top tier of retail Oxford Street landlords usually like to attract.
Famous and established names that did ink deals include Ikea, which has unveiled plans to open in 2023 where Topshop once stood.
A spokesman for the furniture retailer says: “This investmentâ¯marksâ¯part of a long-term plan to transform our retail business, bringingâ¯Ikea closer to customers with a new format store, more relevant to city centres.”
“In spite of the store closures witnessed over the past few months, we firmly believe that physical retail will continue to be an essential part of the shopping experience for customersâ¯- asâ¯centresâ¯for inspiration and expertise, community, and engagement.”
Fashion firm Superdry has also picked the street for a new global flagship shop which launched in November opposite Bond Street station. It features an influencer space on the basement floor where social media stars can get a preview of upcoming collections and record content for their followers.
Superdry’s boss Julian Dunkerton previously told the Evening Standard: “Of course London will bounce back [from the pandemic]... I’m a firm believer that physical stores will play a vital role in the future of retail.” He said the opening of the new Elizabeth Line could provide a bounce for the street.
LOOKING TO 2022
Prior to the introduction of Plan B rules, many landlords reported higher levels of people returning to offices and shops. There is still the possibility of more Covid restrictions coming in the short term, but there are reasons to be optimistic about Oxford Street in the longer term.
New research from property agent BNP Paribas Real Estate says Oxford Street remains the leading shopping capital of Europe, attracting more footfall than any other main prime shopping street in 2021. Oxford Street attracted 72,700 visitors on the day measured by BNP RE, the most across the major shopping streets looked at in 34 European cities.
Gavin Redrupp, head of London retail at BNP Paribas Real Estate, says: “We know the retail sector was hardest hit during the worst of the pandemic, but despite these challenges, Oxford Street and Regent Street remain must-visit destinations. As such, they both continue to attract strong brands with a compelling offer which in turn attracts strong footfall.”
Investors certainly see the appeal. Selfridges is was this week sold for £4 billion to a Thai consortium. Canada’s Weston Family bought the company, which included the iconic Oxford Street store, for just under £600 million in 2003 — a rare example of a department store business gaining, rather than losing, value. The crown jewel space on Oxford Street is a key part of its value.
While Oxford Street is likely to remain a hub, the types of shops on Oxford Street may never be the same again. The days of departure store dominance seem to be on the way out, while more “experiential” shops like Superdry’s flagship are en vouge.
GlobalData’s Stella says: “Consumers can expect to see showrooms from online pureplays, outlets from brands, and out-of-town retailers making their mark in central London.”
