The cost of opening a successful shop in London’s West End may outweigh the benefits. It could be better to go to a shopping centre.

London’s West End remains the most expensive place in the UK from which to trade if you are a retailer.

It is also frequently cited as the area that has the highest footfall, which may make up for the cost of setting up shop in this location.

Yet, in spite of the significant hurdles that need to be cleared, until recently most of its shops have had tenants.

That said, cycling along Regent Street last week, it was hard not to notice that Banana Republic was finally about to give up the ghost on the thoroughfare’s eastern side, when it closes on January 15th.

Banana Republic is closing its UK stores

Banana Republic is closing its UK stores

Banana Republic is due to close its UK stores on January 15th

French Connection has already relinquished its hold on the site just south of Oxford Circus.

“Apocryphal reports indicate that over Christmas many shoppers headed for the Westfield shopping centres that bookend the West End”

Further south again, the building that was home to Austin Reed remains empty, and nearby on Oxford Street, the unit that was BHS still has the hoardings up.

Balancing the costs

No doubt talks are taking place, or have already taken place, to fill these spaces.

But when the rewards for West End trading are so finely balanced against the cost of doing so, is it really worthwhile?

In order to be a retailer on either Regent Street or Oxford Street you will have to pay the landlords a very hefty rent, and business rates are high enough to make the eyes water.

And then there is the matter of creating a store that shoppers will want to visit and which will stand out from the competition.

The latter might be the straw – in the current climate – that breaks the camel’s back, or which might be the difference between signing on the dotted line or walking away from a deal.

Design is expensive, but normally worthwhile.

If revenues are plateauing or even falling, however, and shoppers are past the recent festive euphoria, then it might be better to trade from a shopping centre.

Apocryphal reports indicate that over Christmas many shoppers headed for the Westfield shopping centres that bookend the West End.

Indeed, almost everything that you’ll find on Oxford Street is available in these centres.

Whether shopper migration to these destinations is on the rise will become clear as Christmas trading reports continue to trickle in.

It is hard, however, not to see the West End’s empty units as a sign of the times – and equally difficult to see who might be inclined to take on a very large space as things stand.