The sister brand to Abercrombie & Fitch had been scouting around London and its suburbs for some time and finally settled on Brent Cross shopping centre for its debut this autumn.
While everyone loves a new brand, the excitement about Hollister’s UK entry has been heightened by its commitment to shopping centres. This move differs from Abercrombie & Fitch, which chose to locate in central London in a listed building and, instead of expanding in the UK, is now concentrating on securing other flagship sites in cities across Europe.
Hollister is searching for a central London flagship site, but it is also likely to take about five stores in shopping centres this year. Landlords are desperate for new brands to occupy the millions of square feet of space that is coming on stream this year and brands such as Hollister, with its good product, good heritage and strong covenant behind it, are the Holy Grail.
What landlords should not do is be too eager to sign just any new or expanding retailers. Property experts will all have tales to tell about retailers expanding too quickly when they were able to secure good deals, then inevitably going bust. And these tales are more prevalent during a recession.
One particular example remembered is from the 1990s. The owner of an independent Brighton card shop – we’ll call him Mr X – was approached by a shopping centre landlord and offered such a good deal to relocate to their scheme that he just couldn’t turn it down.
Once he was in the scheme, other shopping centre landlords badgered him to take stores in their schemes, offering even better deals. Mr X was able to bag most of the incentives offered and his stores were trading reasonably well.
He then had the bright idea of opening a gift shop so that he could solicit similar deals for two formats. He opened several shops under two fascias and then, when his rent-free period was up, went bust.
Mr X may have thought he was onto a good thing, but he ended up ruining his business by expanding too quickly. And landlords may have filled some space for a short time, but they were still left liable for the empty stores when he went into administration.
Landlords should not make the same mistake this year, because it only serves to tarnish the industry. Instead, they should work hard to secure the Hollisters of this world.