All Saints chief executive Stephen Craig today said the department concept is “now under great stress” because of unrealistic concession costs. Speaking at the World Retail Congress in Barcelona, Craig said: “We are having to pay 30% in terms of concessions. “Department stores at the moment are not feeling as much of the pain [as other retailers] because that commission rate isn’t coming down. “But when you can now open a shop nextdoor for a vertical margin [then why go into the department store]. I will see our relationship with them contracting.” Craig also critised UK banks’ reluctance to lend money which has meant the group losing out on property deals. He said that All Saints, which has 48 stores globally plus concessions and was part of the failed Baugur Group, is now nearing the end of talks for finance with a British bank. “In the last three to four weeks there has been a change of mood with British banks – they are now open for business. “But we have had to go to them and say what we are doing – with 15% EBITDA banks should have been falling over themselves [to lend finance]. But because they weren’t we are having to say no to fantastic property deals.” Craig was also heavily critical of the oversupply in the market, which has left landlords desperate to fill space. He said that he was offered eight years rent free on a 10-year lease. But, he added: “I don’t want to open too many new stores in the UK. Property acquisition for me will fall. “We are seeing a London and a non-London senario opening up. From a property perspective, I don’t want to see any borders so I’ll go to Amsterdam rather than go to a secondary city in the UK.”
All Saints chief executive Stephen Craig today said the department concept is “now under great stress” because of unrealistic concession costs.
Speaking at the World Retail Congress in Barcelona, Craig said: “We are having to pay 30% in terms of concessions.
“Department stores at the moment are not feeling as much of the pain [as other retailers] because that commission rate isn’t coming down.
“But when you can now open a shop nextdoor for a vertical margin [then why go into the department store]. I will see our relationship with them contracting.”
Craig also critised UK banks’ reluctance to lend money which has meant the group losing out on property deals.
He said that All Saints, which has 48 stores globally plus concessions and was part of the failed Baugur Group, is now nearing the end of talks for finance with a British bank.
“In the last three to four weeks there has been a change of mood with British banks – they are now open for business.
“But we have had to go to them and say what we are doing – with 15% EBITDA banks should have been falling over themselves [to lend finance]. But because they weren’t we are having to say no to fantastic property deals.”
Craig was also heavily critical of the oversupply in the market, which has left landlords desperate to fill space.
He said that he was offered eight years rent free on a 10-year lease.
But, he added: “I don’t want to open too many new stores in the UK. Property acquisition for me will fall.
“We are seeing a London and a non-London senario opening up. From a property perspective, I don’t want to see any borders so I’ll go to Amsterdam rather than go to a secondary city in the UK.”
noella.piokivlehan@rbi.co.uk
