It’s not often I write about a property director in this column but these are transformative times in retail and moves that might previously have flown under the radar begin to take on a new significance.
Such is the case with the news that Debenhams has hired a new property director to replace outgoing Rob Hadfield.
The man tasked with transforming the ailing department store’s property portfolio and redefining a new future for its store estate is Clive Bentley, who has spent the majority of his career in the high street food sector where he led the phenomenal expansion of the Costa Coffee estate from 73 to more than 3,000 stores.
Historically, the role of property director has been relatively low profile, tending to be filled by specialists often from an agency background (Bentley himself began his career with Colliers International).
But given the challenges facing bricks-and-mortar retailers, the role has taken on a new level of importance as businesses enter fierce negotiations with landlords over rents, the outcome of which can determine whether certain stores survive or die.
“Twenty or 10 years ago, the property director role was largely about finding the best new sites”
For an example, one need only look at the news this week that Sports Direct is closing all four of its Intu stores after talks between retailer and landlord broke down. Reading between the lines, it’s clear negotiations have been fractious, to say the least, with Sports Direct saying it was unable to secure “reasonable terms”. Intu pointedly remarked on its enthusiasm in being able to re-let the “underperforming space”.
Landlords are also feeling the pinch. This week, one of the UK’s biggest developers, Land Securities, whose portfolio includes the Bluewater shopping centre, reported that retail challenges were negatively impacting its net asset value.
Twenty or even 10 years ago when retailers were in expansionist mode, the property director role was largely about finding the best new sites and managing those assets effectively. Now, it’s just as often about working with finance teams to strategically restructure often bloated portfolios by analysing which assets are working, which leases need renegotiating and which stores are beyond salvation.
Bentley has done the expansionist part with Costa, but he also has experience of store transformation and restructuring programmes during spells with Eat and Prezzo, both of which were experiencing operational challenges at the time.
But Debenhams, with many of its stores anchoring major shopping centres, represents a different proposition entirely.
Last month, the retailer said it would close 50 underperforming stores over the next three to five years representing almost a third of its portfolio. Chief executive Sergio Bucher says Bentley will bring a “wealth of experience” to the task.
I suspect he will need to call on every bit of it.