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CBRE comments on the effects on landlords and shop workers with the recent failures in the High Street

wantspacegotspace.co.uk - CBRE comments on the effects on landlords and shop workers with the recent failures in the High StreetFollowing the recent announcement that Blockbuster is the latest high street retailer to go into administration, CBRE’s Jonathan De Mello, Head of Retail Consultancy, CBRE, comments: “Landlords have been hit hard by HMV’s administration, given HMV pays circa £150m in rent currently. Since 2008 with the host of retailers we have seen fall by the wayside, landlords have lost an estimated £1.48bn in rent - this includes stores that have been re-let. The biggest loser from all of this however has been the shop workers themselves, with 198,000 retail jobs lost as a direct result of administrations between 2008 and 2012, and many more to go in 2013 as a result of the business failures of Jessops, HMV and Blockbuster.

"The collapse of Blockbuster – hot on the heels of HMV - is the latest blow to the high street, which last year saw the most retail casualties in terms of major administrations and job losses since the demise of Woolworths and MFI in 2008.  HMV's failure, as was the case with a number of 2012 administrations, was down to the significant amount of debt they had taken on. HMV had managed to struggle on this far due to very favourable credit terms provided to them by the major record labels. However, like Jessops, the impact of e-commerce and pure-plays such as Amazon, the same products being sold for cheaper in supermarkets, and digital downloading of media content - collectively led to HMV's inevitable demise.
"2013 is unlikely to be as bad as 2012 in terms of major retail administrations with very few similarly heavily indebted big names left on the high street.  However, for every retail administration we have seen, there are many otherwise healthy retailers looking to downsize their store portfolios in all but the best retail centres, given changing consumer habits and the consequent redundancy of some of our high streets. Whilst retailers will come out of the current downturn leaner and meaner, many high streets will remain in terminal decline. Given this, retail vacancy rates will almost certainly rise to record levels this year.

Posted by The Editor (wantspacegotspace) on 8th February 2013

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