When the financial crisis bit, businesses – particularly heavily indebted ones – were saved by an injection of low interest rates.

When the financial crisis bit, businesses – particularly heavily indebted ones – were saved by an injection of low interest rates.

There’s a new retail zombie emerging whose bricks-and-mortar business is being propped up by internet sales

Jacqueline Gold, Ann Summers CEO

These days it seems as though zombies are everywhere: movies, television, comics, video games, you name it.

They are in the much-lauded TV show The Walking Dead, the latest Plants vs. Zombies game and the immersive street experience 2.8 Hours Later, in which rather ingeniously you can pay to be chased around town by the living dead.

And if you’re very lucky the zombie chasing you might even be wearing one of our Naughty Nurse outfits (I’m told the sexy zombie nurse look is a big hit with zombie men).

The world has gone crazy for zombies and retail is no exception. When the financial crisis bit, businesses – particularly heavily indebted ones – became infected and were only saved by an injection of low interest rates. Insolvency and restructuring firms started to refer to these companies as ‘zombie businesses’ – half dead, half alive and only still staggering along because of their ability to just about cover the interest payments on their debt. With no money to pay off the principal debt or invest in the business for future growth, they are effectively in a ‘zombie state’.

For many retailers the principal debt will come in the form of rent and rates. Since the financial crisis most retailers will have renegotiated payment terms and realigned their store portfolios.

Pragmatic landlords will have compromised on the when and how but will have fought hard to keep their rental premiums as high as possible.

With so many positive economic headlines at the moment – employment and GDP up, inflation and corporation tax down – you could be forgiven for thinking that retail is off life support and that those that looked like death might soon enjoy rude health again.

But there’s a new retail zombie emerging – not one alive because of low interest rates but one whose bricks-and-mortar business is being propped up by burgeoning internet sales.

Not only will the internet sales channel contribute ever-increasing sales and profits but it will also start to take a significant chunk of the budget that might otherwise have been invested in stores.

Until we all work out the true value of the symbiotic relationship between our online and offline shops it’s most likely that the facts presented at our budget meetings will result in fewer new stores, fewer refurbishments and a further edit of property portfolios.

Every pound spent on stores in the bottom-performing quartile might be better spent online. So unless there’s a significant realignment of rental values, there will be a number of retailers who will look at all the reasons to close a store.

Those that have additional hassle factors will stick out like flesh-eating monsters. As we near the referendum in Scotland, the uncertainty that surrounds not just a potential change in currency but changes to employment law, minimum wages, and the relocation of key local employers might just tip the balance. None of us should walk into issues like this in a trance-like state.