And that includes the property industry, because City analysts expect Browett to announce the closure of up to 200 of its 700 stores.
The loss of such a huge chunk of stores from DSGi’s Currys and PC World portfolio could be devastating for the out-of-town market. Already reeling from the fall-out in the furniture market, retail parks will suffer from the departure of another strong covenant.
Some parks rely on the strength of a DSGi store to pull in the customers and, if these stores are set for closure, they will be left with a handful of lesser-known brands and slowly the park will lose its draw.
Yet retail parks could well see the arrival of a knight in shining armour in the shape of US electricals giant Best Buy. The retailer last week announced it will enter the UK market by buying a 50 per cent stake in Carphone Warehouse for£1.1 billion. It is also rumoured that it may open up to 200 stores of between 30,000 and 40,000 sq ft (2,785 and 3,715 sq m), predominantly on retail parks
Carphone Warehouse boss Charles Dunstone said he expects to get good deals on UK retail parks because of the economic turmoil and he’s probably right. Retail parks need new arrivals, especially if well-established brands like DSGi are shutting up shop.
The Best Buy model focuses on service as well as price and range and this is what some believe will give it the edge over DSGi. Yet, if Best Buy really does start giving DSGi a run for its money, leading to more DSGi profit warnings, then DSGi could be forced to shut yet more stores.
Whatever the outcome, Best Buy’s arrival will give retail parks the shake-up they need. There have been some newcomers over the past year such as TK Maxx’s Homesense and Smyths Toys from Ireland, but nothing quite on the scale that Best Buy is reported to be planning.
Best Buy’s arrival will give landlords and retailers alike something to think about. Landlords will be vying to get Best Buy on their parks and retailers will be trying to spruce up their offer so they don’t look pale in comparison. And, in a tough market, any activity is better than none.