Former New Look chief executive Phil Wrigley found himself in good company this week, when Justin King, the CEO of Sainsbury’s, issued his call for the British high street to be “shrunk”.
King used the annual City Food Lecture at the Guildhall to propose that empty shops be converted into houses and even classrooms.
His comments echoed Wrigley’s own, made a few weeks earlier at Oxford University’s Harris Manchester College, and will no doubt be met by a similar split in opinion.
But Wrigley, who was a director at BHS, Dorothy Perkins and Debenhams before New Look, is not a man afraid to stick his neck out.
“One comment on Twitter began with ‘You idiot…’,” he laughs. Another slated his ideas as “defeatist” and “hopelessly cynical”. But, insists Wrigley, “the broad base of people say ‘yes, we kind of get it, so what do we do?’”
The speech that triggered such a response can be boiled down into these arguments: The high street is caught in a “death spiral”, rendered “irrelevant” by the irreversible migration of shoppers to supermarkets, out-of-town malls and the internet. Proposals put forward to government by Mary Portas in the Portas Review would merely be “propping up a failing sector” and not address the future of redundant retail space. The opportunity to use blighted town centres to help tackle the housing crisis was being overlooked: Small shops could be converted into much-needed homes and town and city centres transformed into communities with facilities on their doorstep. And finally, it would take government intervention to drive forward such a plan, by relaxing planning laws and cajoling developers.
All of which was backed up with a steady stream of statistics, from the rising toll of store closures to the declining number of homes being built.
Not surprising then, that it was Portas herself who tweeted: “Saddened to hear Chairman of Majestic Wines defeatest [sic] & hopelessly cynical vision of UK high streets. Hang your head in shame Mr Wrigley.”
So what is Wrigley up to? “I wanted to open the debate from trying to tinker with the high street to a more rigorous understanding of what is actually going on,” he says.
“There is a really serious property angle to this. Unfortunately, because retail is what people experience and because of Mary Portas’s work for the government, it is retail that tends to get all the airplay and people are losing sight of the residential crisis. Maybe this is a solution.”
Out-of-town giant
It is more than two years since Wrigley left New Look, having expanded it from being a small, high street retailer into an out-of-town giant with online and overseas operations. “I can’t pretend to have had complete clarity about what was going to come, but I made a conscious call that the high street was going to come under further pressure,” he recalls.
The 59-year-old father of three still has a significant financial investment in New Look, which hit a more difficult time recently and is looking to exit its smaller high street stores.
After New Look, Wrigley was hired by Hilco to run loss-making furniture retailer Habitat and found himself selling the brand and three flagship stores a year later.
These days, his roles include chairing out-of-town retail investor LXB as well as Majestic, Britain’s largest wine warehouse group. “I wouldn’t have accepted the chairmanships of Majestic and LXB if I didn’t believe that they were following the right business model and were well placed to deliver what the consumer wants,” he says.
But Wrigley insists his decision to join the high street debate is not about supporting a particular cause or protecting his own interests. “I have been very lucky during a period of stability to be personally advantaged by retail and now it’s facing some major problems,” he says.
“What I’m interested in is how we can protect the people affected and is there a clever way to come out with a different model that would revitalise the high streets but on a mixed-use basis with less dependency on retail.”
That doesn’t mean there should be more out-of-town development, he adds. “There are many retail parks that are not doing particularly well and need to be reinvented, so I think there’s bags of space out of town.”
He supports many of the Portas proposals: having market days and free parking, for example. And Portas herself says that housing could be part of the new high street mix, along with offices, sport, schools or other social, commercial and cultural enterprises and meeting places.
“I’m just not persuaded that the aggregate of all those proposals addresses the truth, which is that there’s too much retail space,” he says bluntly. “What I am proposing is surgery. What Mary Portas is proposing is medication. Sometimes you need both.”
His concern is that the significance and pace of change in retail is not being fully recognised or accepted.
Deal with the root causes
“The danger is that if you fiddle with things and don’t deal with the root causes, you can create some real problems for all stakeholders: for the landlords and pension funds writing down the value of their investments; for the shopkeepers seeing their market share leech out of the high street; for the consumers watching the high street disappear in front of their eyes,” he says.
He also vehemently opposes Portas’s idea of rate subsidies for retailers, on the ground that this would risk disturbing market forces.
But like the Portas proposals, his ideas would be impossible to realise without major government intervention.
Section 106 money from out-of-town development should be earmarked to fund residential conversions in the very town centres they challenge, he suggests. But it would surely take much more than this.
Indeed, Wrigley has more ambitious, if somewhat nascent, ideas about how Britain’s one in six vacant shops could be turned into flats and terrace houses. As he sees it, the government is trapped in a “ridiculous merry-go-round” of subsidising inflated housing costs through housing benefit. But more housing supply would bring rents and house prices down, potentially shaving billions off the housing benefit bill.
So, government “should stick its hand in its pocket” to encourage the release of redundant buildings. Landlords could be incentivised to accept change of use or sell their properties into a co-operative for redevelopment as housing. Tax breaks could be given to developers and “we could get a little less anal about some of the incredible development restrictions” – for example, around making new homes eco-friendly.
Converting shops in varying states of repair is far more difficult than building “cookie cutter” homes on greenfield land, he admits. But it would become easier with experience and would mitigate the losses of high street landlords facing declining asset values.
Without the ear of government – or his own television series – how does he hope to take his ideas forward? Wrigley has already spoken to think tank Policy Exchange. He knows the charity through his interests in education, sponsoring reports on thorny subjects such as pupil exclusion and (shortly to be published) schools for profit.
“They’re keen to see if there’s something they might do…they would take the answer I put forward and tear it apart and come up with a better idea I would hope,” he says.
Meanwhile, Downing Street has yet to call. “My sense is that what I’ve outlined at this particular moment is an inconvenient truth and they’d much rather say, ‘look, we’ve got an answer and the answer is what Mary Portas has delivered’,” Wrigley says.
But with Sainsbury’s CEO King becoming the latest high- profile figure to wade into the debate, calls for a more radical rethink of the high street are certainly getting louder.
For more reaction to Mary portas,
see EG’s retail supplement, 3 March.
time for a radical new look
Phil Wrigley, former chief executive of New Look, has been causing a stir with his ideas on reviving the high street. Julia Cahill finds out what all the fuss is about. Portraits by Tom Campbell
