We head to Birmingham and visit the Bullring and the Mailbox schemes, then on to Leicester to take a look at the city’s Highcross scheme. In Derby the Westfield mall has brought a much needed boost to the city, and in Market Harborough Joules is increasing its heritage presence. In Nottingham, the Victoria and Broadgate centres are doing good business, while in Ilkeston, investment is required.
The Midlands is the heartland of England for many retailers. Logistically, being located smack bang in the middle of the country helps the supply chain run smoothly, and as many retailers have offices or warehouses in the area, there is a big retail workforce.
Yet the heritage of the area’s retail industry predates most of these companies, as the East Midlands was once a driving force in textiles. Nottingham was famous for its lace, while Leicester produced a broader range of clothing from socks to sweaters in its sewing factories. The heritage of the shoe trade stemmed from Leicester with the British Shoe Corporation. Today the area still houses the headquarters of Shoe Zone, which swallowed up Stead & Simpson. In its right place Fashion etailer My-Wardrobe is just one retailer located in the Midlands to extol its virtues. The founders of the online business live in Market Harborough in Leicestershire and chose nearby Nottingham for its first office. General manager Sue Ault explains how it began life with an office and distribution centre in Nottingham, then relocated the creative to London last year. She says Nottingham has “a vibrant edge”, and despite the creative team’s relocation, “there’s still so much of Nottingham in the brand”.
My-Wardrobe’s Midlands team is currently packing up boxes ready to move into bigger offices and warehouse space that is even closer to the M1 and East Midlands airport. “You couldn’t ask for a more centrally located base,” says Ault, adding that the retailer prides itself on getting shipments out quickly, even getting to Australia in 24 hours, which is partly down to its location.
Andy Lyon, partner and retail sector expert at PricewaterhouseCoopers in the Midlands, says logistics is a major factor in retailers basing themselves in the Midlands. But he also points out that the workforce is cheaper than in the capital. “While there might not be as many people in creative roles in the Midlands, the number of strong retailers in the area means there is plenty to pick from for all other retail jobs, and it will be more economical than locating in London,” he says.
Unlike some areas of the UK, the health of retail in the region varies widely.
Birmingham is the first stop on this week’s road trip. While hitting the headlines after suffering at the hands of rioters earlier this month, it remains one of the UK’s pre-eminent retail cities. Lyon says the Bullring – the city’s main shopping scheme – is “unrivalled in the Midlands”, and explains how it transformed the city and propelled it up the retail rankings. This transformation has been further aided by the nearby Mailbox scheme, with its high-end retail names such as Harvey Nichols, Emporio Armani and Gieves and Hawkes.
But the Bullring could well be facing some competition on its doorstep, with the development of a full-line John Lewis department store at Birmingham New Street Station.
The store is scheduled to open in 2014 and is part of the New Street Gateway development, which aims to transform the transport hub and offer more than 1.5 million sq ft of new office, retail and leisure space. John Lewis head of retail development Jeremy Collins says the retailer has been knocking on Birmingham’s door for some time: “We’ve been working with the council for around seven years to find a solution to fit in a department store.”
At present, the West Midlands is serviced by a John Lewis in Solihull but Collins says it was “never enough to satisfy the whole region”. After all, the West Midlands has 2.3 million households, a total annual non-food spend of £12bn, and more than 50 million passengers use New Street station every year.
The New Street Gateway will “bring a more mid-upper retailer to the region,” says Collins: “The mainstream offer is done very well with the Bullring, then there’s Harvey Nichols or Selfridges at the premium end, but there’s a significant gap in the mid-upper proposition, and we are the natural anchor for mid to upper retail.” The department store chain is so confident in the region it is also opening an At Home store in Tamworth.
Lyon says the retail health of the West Midlands has been more volatile than the East as its workforce is weighted to automotive and financial services, which “have been through a painful couple of years”. He adds: “The West has suffered more than the average in the economy, which has had a knock-on effect on retail.”
Collins is confident the West Midlands is bouncing back. He points to Land Rover at Solihull, which has kicked off exports to emerging markets such as India and China, and MG in Longbridge receiving Chinese investment. He also says Birmingham has “gone a long way to bring in new industries such as financial services and technology”.
To the East
The East Midlands “tracks closer to the national picture”, says Lyon. “There is a bit of manufacturing left in the East Midlands but there is a mixture of other industries including financial services and hospitality to balance out the economy.”
But that doesn’t mean the East Midlands has had an easy ride in the difficult climate. Holland & Barrett (see box)owner NBTY Europe chief executive Peter Aldis says the Midlands in general has suffered like the rest of the UK. But he says the retailer – which has offices in Nuneaton and Burton-upon-Trent – has seen a pick-up in the region in the last year, and described it as “buoyant”. He adds: “The first area to bounce back has been London and the Southeast but after that comes the Midlands so it’s coping well.”
While the East Midlands does not have as dominant a focus as Birmingham, it has seen plenty of investment in its retail scene over the past few years. In the triangle of Leicester, Derby and Nottingham, the two former city centres have been overhauled while the latter is eagerly awaiting its development. , Jones Lang LaSalle director William Nelson says Leicester and Derby were crying out for investment and “both are performing well”.
Hammerson’s Highcross scheme in Leicester pulled in John Lewis, and Nelson says it also delivered the big units that the
fashion players were desperately seeking.
Aldis is a fan of Leicester. He chose the Highcross to try out his new concept Dr Organics store. “We were desperate to get into Highcross and when we finally did, we thought we’d try out something new, and it’s working well,” he says.
Derby, meanwhile, has benefited from the recent Westfield development. The 1 million sq ft scheme attracted retailers such as Zara to the city and meant that shoppers didn’t have to go to nearby Nottingham for all their retail needs.
Nelson says Westfield Derby is performing well for the major retailers, but adds: “It was the first Westfield development in the UK and they built it too big for the area and it killed off any other retail in Derby.” He says the scheme was “a big blow to the three main high streets” and while the only voids in the centre seem to be in the older part of the development, the surrounding area shows much decline.
Ault believes the investment in Derby has had a knock-on effect on neighbouring Nottingham. “Nottingham has always been the retail magnet of the East Midlands but it has lost its way a bit lately, and become jaded by the developments in Derby and even the Bullring,” she says.
She points out that Nottingham has always been famous for its “great selection of independents and names such as Paul Smith being born there”, but she adds the rest of the city centre “needs a bit of rejuvenation”.
Nottingham has waited a long time for investment and now, a bit like buses, two proposals have come along at once.
The city is anchored either side by shopping centres – Victoria Centre on one side and the Broadmarsh Centre on the other. In between is a medley of mainstream high street stores, quirky independents such as Gauntleys, the fine wine shop and tobacconist, and more upmarket trendy names on the city’s Bridlesmith Gate.
Investment is being ploughed into both centres. The Victoria Centre, owned by Capital Shopping Centres, plans to invest £240m in a 500,000 sq ft expansion including a new department store and large-unit stores. If approved, the developer hopes to start work next year for completion in 2015.
While the Victoria Centre has always been the leading scheme, and already boasts both a John Lewis and a House of Fraser, Martin Breeden, asset management director for the North at CSC London, admits the city itself has “not had any major regeneration for a generation”.
He says: “We have done cosmetic work to the centre but we believe this development will reinforce Nottingham’s reputation as the pre-eminent location in the East Midlands.”
He says the Victoria Centre has been “resilient” despite the tough trading environment, but expects the development to “widen our catchment and for its existing customers to spend more”.
The Broadmarsh Centre, owned by Westfield, is to receive a more dramatic overhaul in the £500m development.
While planning permission for the original scheme had been obtained before the recession hit, Westfield had to put it on hold as retailers and department stores put the kibosh on signing up for new deals in the downturn. Lyon says: “While it’s understandable Westfield put the scheme on hold, the Broadmarsh has really deteriorated in the last couple of years.” He adds: “There has been a lot of campaigning to get the scheme going because it left retailers in limbo, but hopefully things seems to be moving now.”
Walking around the scheme shows just how much it has struggled. It has a very value-focused retail mix and several temporary stores, and its surrounding areas are in dire need of updating. Westfield design director John Morgan says: “The council and ourselves were very frustrated we had to put it on hold but without an anchor and the retailers, we couldn’t start the project. We share the same frustration but are confident we can now progress.”
When Westfield kick-started the project again, it took the opportunity to re-look at the masterplan. “We have learned a lot from Stratford and retailers have been asking for more open streets, so that’s what we want to deliver,” he says.
The Broadmarsh will be opened up and incorporate new public squares, including one with a view of the castle. Two department stores will be housed, one at 150,000 sq ft and another at 60,000 sq ft. Christmas 2015 has been slated as the opening date.
Westfield will also move one of the entrances back to create an extension to key shopping street Bridlesmith Gate, benefiting from its traffic flow. On the outside of that entrance, Westfield has already signed fashion retailers Cult and Hollister, and there is speculation Apple could also take a unit there. Morgan says while the scheme is value-focused at the moment, “we will turn it into the best of the high street”.
He believes Westfield’s track record with retailers at its two London developments will mean it can secure quality retailers for Nottingham. “Some retailers may move from other parts of the city as they’re currently cramped into spaces, but we will also bring in new international names,” he says.
And he refutes any claims that Westfield does not care about the rest of the city centre. “We want the whole centre of Nottingham to regenerate because that will bring more people into the city,” he says. “We’ve opened our scheme up to create links between parts of the city and believe areas such as Bridlesmith Gate will continue to thrive and only get better when we complete.”
Yet perhaps the worry for the Midlands is not the big cities but some of the smaller, forgotten high streets. While small market towns such as Market Harborough and Solihull have continued to thrive in the downturn, others such as Ollerton, Walsall and Ilkeston have suffered.
Aldis says: “Normally I’m all for letting market forces take their course but some of these smaller towns have really suffered since the loss of Woolworths.” He points out that many small towns Woolworths’ stores have not been filled, leaving boarded up shops “leaving the rest of the street to decline”.
“Some of these towns were held together by Woolworths, and it’s odd that the Government can bail out the banks, but let Woolworths go to the wall,” he says.
Ilkeston is one example where the Woolworths has not been replaced. Once a thriving market town, many of the big names have shut up shop and the main high street is now a mix of charity, value or temporary stores.
Lyon believes the Midlands will continue to thrive though. “Some smaller places have suffered but that’s no different to anywhere else in the UK,” he says. “And while that’s difficult for those high streets, the overall picture is not too gloomy.”
The Midlands has much going for it. Logistically, it is one of the best places for retailers to locate both their head offices and distribution centres. But it’s also one of the best regions to open stores, too. It may not be a bed of roses throughout the region, but retail in the big cities is motoring once more.
Holland & Barrett - A Warehouse of dreams
If Roald Dahl’s Charlie and the Chocolate Factory were to be rewritten with a health food slant, then Holland & Barrett’s shiny new warehouse in Burton-upon-Trent would be the perfect backdrop.
strong to dip in your hand and taste the fruits of the machine’s labour, but we all know what happened to the children who did that in the book.
With more than 1 million products bagged up every week, the machinery moves at incredible speed. One room is spouting out banana chips, another chocolate-coated raisins and, as the group also owns Julian Graves, there are also some retro sweets to make the mouth water.
The other key ingredient in this magical warehouse is the vitamin pills and potions.
Brightly coloured pills make their way down glass tubes until they are neatly packed and sealed into pots.
The warehouse, called Burton 2, formed part of Holland & Barrett parent NBTY Europe’s £20m investment into a new warehouse to sit alongside Burton 1, and head office and support centre in Nuneaton, both of which opened earlier this year.
The Willy Wonka of the group, NBTY Europe chief executive Peter Aldis, says the new warehouse will support growth. “When we acquired Julian Graves we needed more warehousing space and more capacity for packing,” he says. “And this new space will now support our development for at least 20 years.”
The warehouse also means the group can take more control of its supply chain, as previously fruit and nuts were sent off site to be coated.
Holland & Barrett can trace its origins back to the 1920s when Samuel Ryder – of golfing trophy fame – ran a market garden in St Albans with his brother James specialising in herbs.
A chain of herbalists followed, which started introducing health foods. Over the years the group changed hands several times, adding further vitamin product ranges along the way, until US giant NBTY bought the company in 1997.
Now comprising more than 1,000 stores across the UK and Europe under the banners of Holland & Barrett, Julian Graves, GNC, Nature’s Way and De Tuinen, Aldis says the group is in good shape despite the turbulent economy.
“Trading in our first half has been better than most but it’s an extremely tough market,” he says. “We have suffered with the rising commodity prices with some fruits and nuts soaring by up to 70%. Just when you think one has bottomed out, another will be on the increase.”
He adds: “You can put your prices up a bit but you have to absorb most of it or the customers won’t come back.” But will the warehouse continue to make fantastical products?
“We’ve invested for the future and will keep adding to what we can do at Burton. There’s nobody else like us on the high street, and we know we have loyal customers.”
Jewel of the Midlands
Market Harborough is one of the wealthiest pockets of the Midlands. Steeped in hunting history, it was also one of the first market towns that Londoners moved to when they wanted to settle down and still commute to the capital.
It was Market Harborough that gave birth to clothing retailer Joules.
Founder Tom Joule says there is much of Market Harborough in the brand. “Going north of London, Market Harborough is the first big, special place to move to which is full of independents, country pubs and a great place to bring up the family. Joules is an escape to the country brand.”
The retailer’s heritage is in the country and equestrian shows, and it remains true to its beginnings by still exhibiting at 300 of these shows per year. “It’s really important that we stay true to our heritage of Market Harborough as that keeps our focus on the customer and what they want,” says Joule. “We may have shops, and online and other channels,but we’re still able to put up a shop in a field in about 50 minutes.”
Following in his father’s footsteps, he started out selling jumpers and socks bought from Leicester factories at the country shows in 1989.
“Our customers were looking after their farms and they didn’t have time to go to the shops,” he says.
By 1994 the business was three times the size, then he and his father put their businesses together and Joules was born. His eccentric father stepped away – he now runs the Joules Eating House and Yard at the back of the Joules shop in Market Harborough, which also boasts an antiques and collectables area. Joule’s sister, however, is involved in the business as head of brand.
Even the retailer’s creative director is part of the larger surrogate family. She went to the same schools as Joule, albeit 12 years later, then after a spell in London, moved back to Market Harborough when she wanted to start a family. She even worked for his father in the tea shop when she was at school. “It’s so important that we have strong family values because that’s what our customers believe in and that’s what makes them loyal,” says Joule.
Today, the business has around 60 shops and concessions, wholesaling, an online business and a turnover of £60m.
Joule says it isn’t easy ensuring your brand values remain strong as you grow.
“We have wavered,” he explains. “But you have to be strong in not following trends but staying true to what you are.” He adds: “We will remain true to who we are.”
The country heritage is embedded in the brand, even down to the logo which started out as Joule’s father’s dog, but is now a hare, but being located in Market Harborough does have some challenges.
“Logistically, Market Harborough is great as it’s the most central place in the UK, but it’s not easy to hire designers,” says Joule. “We have lots of technicians, product team and buyers but it’s difficult to draw designers here.”
But it doesn’t seem to have stopped the company’s growth. The last year has been one of investment, including getting the right calibre of staff.
It has also doubled the size of its warehouse at Corby – just nine miles and two roundabouts away from the Market Harborough – and is exploring international expansion.
“There’s so much for us to go for and while there is a sense of trepidation around in the tough climate, we believe if you stay true to your heritage, you’ll continue to do well.”