Shopping centre owner Hammerson will pursue a new premium-centric strategy in a bid to weather the retail downturn.
The revelation came off the back of falling income for the six months to June 30.
The strategy update will see Hammerson retreat from the retail park sector “over the medium term” in favour of flagship and premium developments.
It will also pivot its focus from department stores and high street fashion, both of which are struggling amid increased online competition and a lack of consumer appetite, shrinking space by 25% and 20% respectively.
Instead, Hammerson will prioritise “differentiated brands” and “aspirational fashion” together with leisure and event spaces.
It will also establish a new ‘City Quarters’ concept in a bid to maximise value from the valuable land which surrounds many of its centres and increase its business outside of the UK by 10%.
These new tenets will be underpinned by greater levels of operational excellence, which should result in at least £7m savings per year thanks to disposals and management changes including shrinking the number of its executive directors from four to two.
Chief investment officer Peter Cole, who is set to retire, will be retained on a consultancy basis until early 2020 in order to provide development-related services.
Jean-Philippe Mouton will step down as an executive director at the end of the year. Mouton will remain managing director of the company’s French business and will continue to be responsible for group marketing.
Hammerson will also begin a focus on capital efficiency, beginning a share buyback of up to £300m and deferring the development of its Brent Cross project.
Hammerson’s profits crashed 80.6% to £55.7m in the six months to June 30 although adjusted profit inched up 0.5% to £120m.
Net rental income fell 3% to £178.5m.
Chief executive David Atkins said: “Through increasing the level of disposals, including exiting the retail parks sector, we will now focus solely on winning destinations of the highest quality: flagship retail destinations and premium outlets.
“These are the venues we believe will maintain relevance and outperform against the shifting retail backdrop.”