The Retail Week tour of the Midlands starts in the UK’s second-largest city, Birmingham, before visiting Portas Pilot town Wolverhampton and West Bromwich, home of the New Square development.

We then head to Nottingham, where one of the region’s largest private employers, Boots, is based, followed by a stop-off at George at Asda’s new-look department in Leicester’s Fosse Park.

A combination of a strong production heritage and the fact it is in the middle of the country has made the Midlands a hive of retail activity.

In fact, its geographical location has led to many big-name retailers using it as a base for headquarters or warehouse operations.

The region has a history of vibrant manufacturing, driven by Nottingham’s lace, Leicester’s shoes and sewing industries and the Black Country’s traditional heavy industry.

But today’s picture has evolved. With much of the UK’s supply base moving to Asia, the area has realigned its mix of industries and retail forms a core part.

However, the recession has been tough on the Midlands’ high streets. A swathe of smaller towns, as well as the main retail destinations of Nottingham, Leicester and Birmingham, have struggled to compete with out-of-town shopping centres and online retail.

West watch

Birmingham’s Bullring

Birmingham’s Bullring

The West Midlands has had a particularly hard time over the past decades as the UK moved on from its manufacturing roots. More recently, a continuing squeeze on job numbers has hit spending but retail has played its part in filling the jobs vacuum. Birmingham’s Bullring, which opened in September 2003, created 8,000 jobs in the city and, at 1.35 million sq ft, is one of the largest shopping centres in Europe.

The UK’s second largest city is on the verge of a new retail dawn. Adjacent to New Street Station in Birmingham city centre, a 250,000 sq ft John Lewis store will be one of the retailer’s biggest outside London, housing more than 350,000 products when it opens in 2014.

“It is going to be very significant for the city,” says David Pardoe, retail manager at The Mailbox shopping centre, just a stone’s throw from New Street Station. “It will raise the bar for retail in the city. It’s the one big name we’re missing. Solihull, where there’s already a John Lewis, is a great place to shop but this will really lift Birmingham,” he says.

The redevelopment of New Street Station itself is likely to be complemented by rail development High Speed 2, which will improve travel times between London, Birmingham and Manchester by 2026.

But one spectre still hangs darkly over Birmingham’s retail scene: last year’s riots. The violence and vandalism that exploded in London a year ago spread through the country, and was keenly felt at The Mailbox.

“It was a time everybody here will never forget. I remembered the riots of the 1980s but this was a different kind of riot,” says Pardoe. “The shops raided around the country were for mobile phones and trainers. Customers felt unsafe and nervous walking through the city.

“With residents living within The Mailbox complex, it was impossible for the centre to shut completely so a strategy of heightened security and early store closing was employed.

“It was a difficult time. The Armani store was raided, it was very vulnerable as it’s on the front of the centre. But it was up and running again within a couple of weeks. It was great to see everybody rally round.”

A year on, the centre is back in shape. At the time of visiting, a table tennis table, a tennis court and huge TV screens showing the Olympic Games dominated the centre as it capitalised on the summer of sport.

Faced with declining consumer spending over recent years, the centre has also had to innovate to drive footfall to high-end retailers including Harvey Nichols, Jaeger and LK Bennett. Its strategy includes hosting events such as Style Birmingham Live later this year and Birmingham Made Me, a pop-up shop run by Birmingham City University.

Retailers in the centre are also allowed to extend their window displays into adjacent vacant units to make up for the space left by the centre’s empty lets.

Wolverhampton

Elsewhere in the West Midlands, Wolverhampton City Council leaders have reason to hope that the struggling centre’s fortunes will improve. The city was selected as a Portas Pilot, which will support its aim to increase footfall through various initiatives including a local loyalty card.

In addition, £25m is earmarked for a new shopping, leisure, office and housing development that will capitalise on footfall generated by proposed new Sainsbury’s and Tesco stores near Cleveland Street.

The city centre at present has an estimated trading gap – the difference between actual and possible city centre sales – of £134m, according to council estimates, and council strategic director Charles Green says: “There is a major and achievable opportunity to transform the city centre’s retail offer with additional capacity for nearly 500,500 sq ft of retail and leisure floor space, of which 300,000 sq ft can be absorbed into better configured and improved retail space in the existing city centre shopping centres.”

Wolverhampton City Council officer Eliot Ward adds: “We have now rolled up our sleeves and said that if you do not get your city centre right then the rest goes by the wayside. We have made some strategic acquisitions of key land sites and put our money where our mouth is.”

West Bromwich

Down the road in West Bromwich, plans are also afoot for a new shopping destination. Developers are feeling confident about the £140m New Square development from Tesco subsidiary Spenhill in the town centre.

New Square is a 473,000 sq ft retail and leisure scheme in Sandwell, and is 60% pre-let a year ahead of its opening, anchored by a Tesco Extra.

International fashion footwear retailer Deichmann and Phones 4U are the latest to sign up following key names including Primark, which has signed for 50,000 sq ft, Next, JD Sports and Bank.

New Square will include 248,000 sq ft of retail space, 36,000 sq ft of cinema and restaurant space and will provide 1,900 car parking spaces. The development will have a mix of retailers and the units range from 600 sq ft to 11,000 sq ft, allowing the developers to target local, independent and national retailers.

Nottingham

Nottingham has long been considered the retail capital of the East Midlands, with two large in-town shopping centres linked by the trendy Bridlesmith Gate and the redeveloped Market Square. However, some notable losses in key locations including Habitat and Clinton Cards and renowned independent record store Selectadisc from the Market Square area have depleted the city’s retail offer.

The demise of the Broadmarsh Shopping Centre – once the vibrant gateway to the city from the train station – contributed to the stagnation of the city’s retail scene. And a proposed £500m redevelopment of the scheme by Westfield was abandoned last year.

Nottingham’s Broadmarsh shopping centre

Nottingham’s Broadmarsh shopping centre

Last month, however, Capital Shopping Centres – which also owns the Broadmarsh’s arch-rival, Victoria Centre – revealed plans to redevelop Broadmarsh with more specialist shops and restaurants after buying Westfield’s stake for £55m.

Following Office of Fair Trading approval, Capital Shopping Centres aims to upgrade both centres, but differentiating them and perhaps include a cinema at Broadmarsh to drive footfall. A planning application is expected in early 2013 and the new Broadmarsh could be complete by 2016.

PwC partner Andy Lyon says: “Broadmarsh is now having a small-scale redevelopment, which is long overdue. Meanwhile, the Victoria Centre is also about to have a redevelopment. This could put Nottingham back at number one for retail in the East Midlands.”

The city hopes that these developments can draw people back in from satellite towns including Ilkeston, Long Eaton and Market Harborough.

Another boost to the city was the £4.3bn retail ‘deal of the decade’, struck in Beeston between one of the region’s largest private employers, Boots, and American drug store giant Walgreens. Walgreens was quick to stress that not only would there be no job losses at the site but that Nottingham would be the hub of the multinational giant’s innovation.

Meanwhile, 14 miles up Brian Clough Way, Derby provides a secondary retail offer with a decent-sized town centre including high street chains and independents. Derbyshire is also home to one of retail’s most historic names.

Thorntons’ headquarters in Alfreton is a hive of chocolate-making activity. Although the retailer is facing a difficult time and shuttering stores, it remains a brand with a heritage, and chief executive Jonathan Hart is enacting a plan to return a slimmed-down, multichannel Thorntons to success.

One element of Thorntons’ revival will be its new website. With improved navigation and a new look, the site is seen as crucial to increasing revenue.

Leicester

Leicester, meanwhile, has been the focus of a tranche of retail operations for some time – many including Next, George at Asda and Jessops are based in and around the city.

“Next is a major asset to the region, it’s going from strength to strength,” says Lyon. “It is keeping its offering fresh and has become a true multichannel business so it is definitely a good local employer.”

The city’s retail scene is dominated by the in-town Highcross Leicester shopping centre. Originally named The Shires, it underwent a £350m extension and refurbishment in 2008. And there’s the Fosse Park retail park, which is one of the trial sites for George at Asda’s new-model department in the grocer’s 74,000 sq ft unit at the park.

The George 21 concept store at Fosse Park

The George 21 concept store at Fosse Park

The boutique, part of George’s strategy to “dial up fashion credentials”, according to Asda and George chief merchandising officer Andrew Moore, includes the remodelling of 13,000 sq ft, with new flooring and fixtures, a video screen showing fashion shows and a ‘front 16ft’ area where displays are changed twice weekly.

Mannequins have been raised to above head height and the changing rooms are adapted to reflect the experience of a high street fashion retailer.

The new approach also allows shoppers looking for a quick fix to nip into the department’s perimeter to buy functional clothing while items to browse are placed further back.

George retail and international director Jo Whitfield says the concept, first tried in Burnden Park in Bolton in late 2011, is performing well. “We extended that trial in May this year to Fosse Park and two other stores. In its first week, Fosse Park was performing substantially ahead of chain.”

There are at present six so-called George 21 concept stores and there are plans to roll them out across the chain.

Whitfield says: “We’re fourth by value and third by volume in the UK, and the largest UK retailer by volume for kids’ clothing so we’re pleased we are getting it right for customers.”

Just outside Leicester, shoe specialist Brantano is headquartered in Coalville. The retailer, which is part of Dutch-based Macintosh Retail Group, harks back to the East Midlands’ legacy in footwear both in Leicester and Northampton. Brantano entered the UK market in 1998 by purchasing 47 Shoe City stores from British Shoe Corporation, which dominated UK footwear.

Under the stewardship of managing director David Short, the family and fashion footwear specialist is enjoying a strong period, with both sales and its property portfolio growing.

Having closed a number of loss- making shops last year to bring its estate to 145, Short has brought down the retailer’s average target store size from 7,000 sq ft to 6,000 sq ft and set a target of 200 branches by the end of 2014, at which point the estate will be mature.

Short says the retailer has benefited from having the space to showcase a year-round offer during the torrid summer. Brantano also has strong links with the brands its sells, even sharing data with Clarks to ensure they do not compete when opening new stores.

Short says the retailer is heading in the right direction. It is investing further in its warehouse, new ecommerce manager Nicola Sharlott is to drive multichannel growth, and consolidation of the industry with just a few large, specialist players is also set to drive success. “We have made positive EBITDA in each of the last four years,” says Short. “We are ahead of budget and comfortably ahead of last year. We are trading well off the back of a very good six weeks and the second half of the year is usually better.”

The Midlands remains well placed logistically to maintain and attract large-scale retail presence. The picture remains mixed though, with the West Midlands recording one of the highest vacancy rates, according to the BRC, from February to April at 12.9%. Footfall fell 5.7% in the same period.

The East Midlands suffered one of the smallest declines, at 3.7%, and a vacancy rate of 10.2%. While smaller high streets in tertiary towns are being hit as part of a wider trend, the bigger cities have some promising retail prospects. Revamped shopping centres, new developments and the presence of cutting-edge retailers augur well for the future in a region built on a strong foundation.

Le Chien Et Moi

Le Chien Et Moi

Le Chien Et Moi

In the month Paul Smith announced it would re-enter China, Pip Bolton was pondering where to store another batch of furniture. Homewares independent Le Chien Et Moi, based just outside Nottingham’s centre on Derby Road, is run by one of Paul Smith’s liveliest and most ambitious graduates.

Bolton, who worked for Nottingham’s biggest designer for 10 years and for DKNY in London, set up the shop she shares with her dog Mulberry in 2008, while her husband Andrew still works for Paul Smith.

“Paul and Nottingham are strongly linked, and it was an incredible experience to work for a company like that, both of us being Nottingham born and bred. Slowly I found a passion for sourcing products. It gathered momentum and, after a long process, we secured the property,” she says.

Specialising in vintage homewares, Le Chien Et Moi stands out among a clutch of independents on a street that has long been synonymous with antiques because of its quirky products and innovative merchandising.

“The best thing I hear is when people say our shop is where they choose to come if they have a spare hour, as people’s spare time is so precious,” says Bolton, who uses a carefully selected mix of fridges, bell jars, hat stands and shelves to display her products, largely sourced from independent fairs and overseas.

So how has Bolton found running a fledgling indie in the height of a recession? “It’s really tough, there’s no point pretending,” she acknowledges. “The recession hit six months after we opened but, slowly, word of mouth spread and the customers flowed from all over the country. The key is to keep a really close eye on every area of the business.

“Part of the wider high street problem is that independents have generally been undervalued but I think councils are starting to genuinely recognise the value they have.”

The Midlands' big hitting retailers

The Midlands’ big hitting retailers

Dunelm Mill

Dunelm Mill is one of the biggest success stories in the region and nationwide. The value homewares chain is one of the retailers that has enjoyed success throughout the downturn.

Nick Wharton

Nick Wharton

Dunelm chief executive Nick Wharton, who swapped break pads for bedding when he joined from Halfords in February 2011, says it is all down to product range, value and service.

“We have the ability under one roof to carry a very broad range of products,” says Wharton. “We have bath towels ranging from £10 to £40. We service a very broad church of customers.”

Despite its solid financial performance, Dunelm is not standing still. It has been pushing hard on its multichannel offer, for instance, with initiatives such as reserve and collect well received by shoppers.

Wharton calls it the “perfect model” for the Dunelm customer, who still wants to touch and feel products before buying, but likes the security of knowing it will be in store when they visit.

It’s a good model for the retailer too. “Our walk-in customer spends £25 on average. Our reserve and collect shopper spends more than that,” he says.

Dunelm will also benefit from potentially being able to scale down the size of its stores thanks to multichannel. “We will need differently configured

stores and maybe ones a bit smaller. People will drive a bit further with the certainty of getting product,” Wharton says.“In future stores may be a bit smaller, and fewer, but we can factor that into progression.”

The average new Dunelm store is already about 10% smaller than two years ago because of online growth, Wharton points out.

A focus will be improving online delivery, which Wharton describes as “too long and slightly inflexible”. Online sales account for 3% of sales currently, up from less than 1% two years ago.

The retailer is also expanding its stores business and, with 60 to 70 stores across the UK still within its sights, there is plenty left for the retailer to achieve.

Nicola Harrison

Taking on the big four grocers

AF Blakemore

Spar, AF Blakemore

Spar, AF Blakemore

With operations in retail, wholesale, food service and distribution and a turnover of more than £1bn, AF Blakemore, based in Willenhall in the West Midlands, is a giant in the convenience sector.

The family owned business is enjoying a strong period buoyed by a surge in the convenience sector, which is forecast to culminate in a £44bn market by 2017, according to the IGD. The retailer has its roots in central Wolverhampton where it was founded by Arthur and Harriet Blakemore in 1917, before moving to Walsall in 1966 and then to Long Acres Industrial Estate in Willenhall in 1981.

AF Blakemore supplies 1,020 Spar stores, 326 of which it owns, as well as 332 Lifestyle stores. The strategy has allowed the company to leverage Spar’s global brand and new product development while developing its own strengths in logistical capabilities.

“Being a diversified business feeds into our family culture,” says managing director Peter Blakemore in a rare interview. “If we focused on just one area we might be more successful in the short term but it is definitely the right strategy for long-term growth.”

Blakemore is happy for this growth to include acquisitions, such as the purchase of wholesaler Capper & Co last year, understood to have cost between £30m to £40m, and says the firm has “always made the right acquisitions at the right time” over the past 50 years.

Fighting the big four: “Shoppers are moving to ‘food for tonight’ shopping. We are developing newly built stores that have parking. The potential for big boxes is limited so the hypermarkets are moving into convenience,” says Blakemore. “However, we have the expertise and efficiencies to deal with this. There are still great opportunities for next-generation, 2 million sq ft neighbourhood stores.”

Midcounties Co-operative

Midcounties Co-operative

Midcounties Co-operative

The big grocers were quite late into the West Midlands because of the demographic,” maintains Ben Reid, chief executive of Midcounties Co-operative. “But the superstores have come in over the last two to three years and people are still shopping locally.”

Reid heads the country’s largest independent co-operative, with 300 food stores including the 10 recently acquired from Harry Tuffin and another 10 openings planned for this year. The retailer’s

average store is 4,500 sq ft including travel and pharmacy operations.

Although independent of The Co-operative Group, Midcounties has a wholesale purchasing partnership with the wider group and Reid says the “stresses and strains” The Co-op is going through following the arduous acquisition of Somerfield and £750m acquisition of 632 Lloyds banking branches are not helpful.

He is keen for the group to step up its work in online retail. “I do not believe that the Co-operative can continue for much longer without an ecommerce solution. It’s untenable and as a movement there needs to be development otherwise Midcounties will have to take the leap ourselves,” he says, adding that Midcounties is weighing up retail partners for click-and-collect tie-ups.

Midcounties is outperforming The Co-operative Group with like-for-likes up 1.5% in the year to the end of June, but conditions remain tough.

“We do not seem to have been able to gain momentum. Despite the Euros and the Jubilee, nothing seems to excite customers and the weather means that we are not getting anything back from fresh and barbecue investments,” he says.

“The West Midlands is fairly divided in terms of retail conditions. Walsall, Dudley, West Brom, Wolverhampton, Swindon and Cannock are depressed while in Warwick and Leamington the picture is more positive,” observes Reid.

Fighting the big four: “It sharpens your focus,” says Reid. “Convenience stores are getting better and consumer numbers are rising so that reinforces that The Local market is a good place to be in. We have had it easy in the West Midlands for a long time and I see no reason we can’t be the best convenience retailer.”