Value retailer The Works is looking to “selective” store openings where it can convince landlords to swallow some of the costs, claiming the retail property market is “in our favour”.
Announcing interim results to 25 October, the company highlighted the halting of its new shop opening programme during the pandemic outside of “a very small number of landlord-funded new store openings”.
However, the company said that the retail property market “remains in our favour and will likely continue to do so in the medium-term”, adding that it sees scope for relocations and new stores at which “the landlord is willing to fund our upfront capital expenditure”.
The Works closed six loss-making stores during the period, opened two and relocated a further two. The company said its new stores had traded well and delivered payback faster than previous rates, “demonstrating the strong returns that remain possible from new store openings”.
The company’s 532 stores are currently all closed during the national lockdown.
“We are conscious that retail footfall may be significantly depressed for some time, and may never recover to previous levels in certain locations and, as such, we continue to retain flexibility within our existing portfolio with the average term to the next break or exit point of just over two years,” the company said.
“This means that we can continue to lower rents, or exit locations, where lower retail footfall means stores are no longer profitable.”
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