Up to 50 retailers could quit the UK this year as the credit crunch hampers their ability to pay high rents.
Speaking at the International Retail Congress in Barcelona this week, Tarlok Teji, a partner in UK retail at accountant Deloitte, warned that unless landlords lowered, rents more and more retailers would be forced to vacate their stores.
A dozen chains, including fashion retailers Mexx and Morgan, have already left the UK. Last month, George, the clothing arm of Asda, decided to close 10 of its 11 standalone stores.
“The US, UK and most of the Western economies are over capacity in terms of retail outlets,” said Teji, “which means prices will have to come down in terms of rentals.”
He said that even an influx of international retailers would not be enough to soak up the additional space.
“If you are a retailer operating on a global stage why would you want to go to the UK? It has poor infrastructure, different currency and exchange rates, and competition that is so tough that UK retailers are going abroad so that they can grow.”
noella.pio.kivlehan@rbi.co.uk
