Andy Clarke, CEO of tdk client Asda, wrote the following in the Belfast Telegraph on the 9th August 2011.
Attitude, opportunity and value are crucial in these tough times, says Asda CEO Andy Clarke, who argues the large retail levy is not sensible for Northern Ireland
Shops boarded up, strikes, riot police, demonstrators, confidence plunging, debt rising, the worst economic squeeze in decades. No, it’s not Greece — it’s the UK. As a nation, we face perhaps the greatest economic challenge of my lifetime.
It will test our mettle, but it’s in times like these that countries and individuals discover what they can really achieve, how far they can go, what they are really made of. This is as important at a regional level as it is nationally.
My most testing moment came when I left school — at the age of 16 with one O level.
My prospects weren’t great and although I was brought up with a good attitude to work, I had no real direction.
My first job was cleaning tables and sweeping floors. Then I got a job at Fine Fare stacking shelves and met a man who inspired me to succeed.
His name was Dennis Lever. He believed in me and he helped me develop the skills needed to become a retailer.
Now I’m the chief executive of Asda, but the route I took to get here taught me two lessons. The first is that anything is possible. And the second is that sometimes we all need help to realise our potential.
So that’s what I keep in mind as I look at the chaos on the high street where a raft of big-name retailers are in trouble or closing down: Thorntons, Carpetright, Habitat, T J Hughes, Jane Norman.
Our Asda Income Tracker clearly demonstrates the challenges in Northern Ireland on disposable income. We see this in our stores, with cash and debit transactions on the increase as customers buy now, pay now, rather than buy now pay later.
But we should remind ourselves this isn’t Greece. We’re not hamstrung by the eurozone and we don’t need bailing out. We shouldn’t underestimate that there are still opportunities out there, for individuals, for UK firms of all sizes, and for our country as a whole.
Our economy may be stuttering, but we’re still in better shape than most of our neighbours. Like the old war-time poster said: Keep Calm and Carry On. Unlike the dark days of the 1970s, the traffic lights still work, the buses are running and the bins are being emptied — even if it is once a fortnight for some of us.
But what about retailers, while we’re waiting for better times?
At Asda our monthly income tracker uses official data to provide an unbiased, accurate view of how the average family is coping, once they’ve paid for essentials such as utilities and rent.
In May we saw the biggest fall in family spending power in four years. We found the average UK household had £165 a week of discretionary income, a drop of 8% in 12 months, creating a £14 a week hole in people’s pockets. The latest figures are looking a little better, with the Asda Income Tracker showing UK families had £167 in weekly disposable income available to them — but this is still £9 a week down year-on- year.
In Northern Ireland, however, the news is bleaker still. The region continues to suffer from the lowest household spending power — dropping by 14.8% since last year to just £80 per week — less than half of the UK average.
This won’t be a surprise to the average NI family and it is changing the way they shop. Shoppers are budgeting hard and cutting back. If they don’t need it, they’re not buying it.
Which sets shopkeepers like me a challenge that I relish. Offer consumers genuine value and they still have money to spend.
That challenge is made all the more difficult when politicians take the wrong decisions. Currently the Northern Ireland Executive is consulting on introducing a new tax on large retailers that would raise around £7 million a year.
In my view, it’s the wrong time and the wrong tax. This is the time to pull together and encourage businesses to invest in Northern Ireland and create jobs, not to send a signal that investment is unwelcome. Northern Ireland is already a more expensive market to operate in, and adding to that cost burden when families in Northern Ireland have the lowest level of discretionary income in the UK would be the wrong decision.
Our research also shows only 45% feel their job is secure and almost 60% believe their pay will be frozen this year. Meanwhile, only one person in 20 thinks they’ll get a pay rise this year, down from one in 10 last year.
Which brings me to the other way in which businesses such as Asda can help. By providing fulfilling jobs paying a fair wage and where the only limit on your progress is talent and ambition.
In tough times it’s easy to see investing in your people as an additional ‘cost’ to the business. I’ve never seen it like that.
Recently I was at an event in the North of England that was arranged to help local people who were looking for work. The drive, passion and commitment of the 400 people I met that day was so impressive.
One third of all our new recruits are aged 18 to 24. We are one of only a few retailers in the UK to offer the same rate of pay to under 18s. We do this as a matter of principle. As we know, these are tough times. But we can and will emerge from them stronger than ever.
Read more: http://www.belfasttelegraph.co.uk/business/business-month/out-to-create-blue-skies-16034349.html#ixzz1UoNTyor1
Belfast based TDK Commercial Property Consultants joint letting agents at Tullamore Retail Park are pleased to confirm that Cost Plus Sofa Ireland’s biggest chain of sofa megastores will open a 10,000 sq.ft. store in the scheme during August.
Cost Plus Sofas first store opened in Mullingar and during the last 3 years they have grown to become the Ireland’s largest sofa megastore chain and their range is now the largest on offer anywhere in the Ireland. They currently have 20 trading stores in Ireland and offer a nationwide delivery service.
Mark Thallon of joint letting agents TDK Commercial Property Consultants commented “The addition of Cost Plus Sofas to Tullamore Retail Park will help strengthen further the retail offer in the scheme.They have committed to a new 10 year lease and this is a great vote of confidence in the scheme in what is obviously a difficult market and confirms our belief that Tullamore Retail Park is one of the strongest schemes in the Midlands.”
The Swedish based international retailer is to open new stores in Lisburn and Newry in the coming months, creating around 40 jobs in the process.
Magnus Olsson, H&M country manager for Ireland, said: “We’ve been looking for opportunities to expand our portfolio in Northern Ireland for some time and The Quays in Newry and the Bow Street Mall in Lisburn are ideal locations for us to do so.”
TDK Commercial Property Consultants in Belfast acted on behalf of H&M in securing the stores. Mark Thallon, Retail Partner in TDK, said: “We are delighted to have assisted in these acquisitions and believe these stores will further enhance H&M’s reputation as a market leader in the Northern Irish Retail Market. H&M are also keen to secure other locations within Northern Ireland.”
H&M, which is second in global sales to Zara-owner Inditex, already has stores in Ballymena, Craigavon and two in Belfast. The news comes on the back of the recent announcement on Kilkenny and the company has announced they plan to open 10 new stores across the UK and Ireland this autumn.
Fashion giants and TDK clients H&M have revealed an exclusive link up with designer.
H&M is proud to announce that its autumn 2011 designer collaboration will be with one of the world’s most legendary fashion brands, Versace. Designed by its creative director Donatella Versace, the exclusive collection will look back to the vibrant heritage of the brand, full of leather, print, colour and exuberance in exclusive materials at fantastic H&M prices. The collection will include ranges for women, men and selected pieces for the home. It will be available from 17 November in around 300 stores worldwide, as well as on-line. In addition, Donatella Versace has also designed a pre-spring collection for H&M which will be exclusively available in countries with H&M on-line sales from January 19, 2012.
“I am thrilled to be collaborating with H&M and to have the opportunity of reaching their wide audience. The collection will be quintessential Versace, perfect for H&M and Versace fans everywhere,” says Donatella Versace.
“Versace is one of the most important brands of recent times, and their collection for H&M will be glamorous and flamboyant – everything Versace stands for. Donatella Versace is sharing with us iconic designs from the archives. This is such a celebratory collaboration and it is perfect for the party season,” says Margareta van den Bosch, creative advisor at H&M.
Versace is a brand that is steeped in glamour to its very core. Founded in 1978 by Gianni Versace, his daring dresses and wild iconography revolutionized fashion, creating provocative styles from classical themes which were all cut with an impeccable design eye. Since 1997, Donatella Versace has continued Gianni Versace’s work as creative director, evolving the brand into a global fashion house at the forefront of what luxury means today. Famous worldwide for her signature wardrobe, Donatella Versace is the epitome of everything the Versace house stands for.
Versace is the latest house to collaborate with H&M on an exclusive designer collection, following the likes of Karl Lagerfeld, Stella McCartney, Comme des Garçons, Jimmy Choo and, most recently, Lanvin. For H&M, Donatella Versace has looked back to the archives to reinterpret some classic Versace designs. The womenswear collection will be dominated by dresses that fit right in with the spirit of the season, featuring studded leather, silk and colorful print, with accessories including high heels and costume jewellery. The men’s collection will focus on sharp tailoring, including the perfect tuxedo, as well as belts and jewellery for men, too. For the first time in a designer collaboration at H&M the collection will consist of some homeware pieces, including cushions and a bedspread.
Taken from http://about.hm.com/es/prensa/comunicadosdeprensa/moda__prfashion.nhtml
Castlecourt shopping centre in Belfast is being put up for sale.
The industry magazine Property Week has said the two owners of the centre, Westfield and Hermes, hope to get about £170m for the centre.
If the building is sold, it will break the record for the single biggest property transaction in the city.
Castlecourt contains about 350,000 sq ft of retail space and its tenants are expected to pay about £13m a year in rent.
BBC NI business editor Jim Fitzpatrick, said industry sources believe the price is a potential bargain because its owners had it on the market just two years ago for £350 million.
“The dramatic drop in price reflects the massive change in the property market generally and the Belfast retail scene in particular,” he added.
“Once the landmark development, Castlecourt has had to contend with stiff competition from Victoria Square in recent years, combined with a recession which has seen shoppers spending less in the High Street.”
Westfield is an Australian company which controls one of the world’s largest portfolios of shopping centres. Hermes is a London-based investment company.
Our editor added that reports indicated that Westfield wanted to focus on regional centres.
“That may suggest that they will now concentrate more firepower than ever trying to get development moving at their stalled Sprucefield site where they want to build a John Lewis store and other retail units,” he said.
Taken from BBC website. http://www.bbc.co.uk/news/uk-northern-ireland-13644268
Ulster Bank has taken control of The Outlet centre in Banbridge following financial problems for the developer.
The £70m store, the biggest factory outlet in Ireland, opened in 2007.
Ulster Bank said it was committed to working with the centre’s management to secure its long-term future. Developer Guernsey-based John Farmer has not commented.
BBC NI business editor Jim Fitzpatrick said the retail park had “fallen victim to the demise of the southern shopper”.
“It was conceived for an all-Ireland market with the developer citing the big savings that could be enjoyed by southern consumers.
“But the huge cost of underwriting the Republic’s banking sector has left Irish taxpayers with considerably less money to spend.
“That, combined with higher petrol costs, has removed the incentive for shoppers to head north for a bargain.”
Documents seen by the BBC show that the bank is holding The Outlet in a company called West Register (Northern Ireland).
It is the NI branch of a special group of companies set up by the bank’s parent company, Royal Bank of Scotland.
The purpose of this group is to hold troubled businesses that the bank thinks it should retain because of the possibility that they could recover some of their value.
For example, the Richmond Centre in Londonderry was bought by West Register last year after the company that owned it went bust owing RBS millions.
In May, an Ulster Bank mortgage relating to The Outlet was registered against West Register (Northern Ireland).
In a statement, Ulster Bank said the shopping centre had a strong tenant list making up its 82 stores, employing approximately 500 full and part time staff.
“West Register (Northern Ireland) Property Limited will work with the Centre’s management team to secure the long term success of The Outlet.”
What has Ulster Bank done?
The bank’s move suggests it has converted its debt into shares.
That would mean ownership of the business has transferred from Mr Farmer’s company to Ulster Bank.
The bank would then hope that the business’ performance improves and it eventually makes a profit.
Taken from the BBC website on 13/06/11. http://www.bbc.co.uk/news/uk-northern-ireland-13750531
The ongoing importance of the retail sector to the Northern Ireland economy is again borne out by the Top 100 companies with x retailers in the list. Within the retail sector those retailers who predominantly sell food are at the forefront of employment numbers with national chains Tesco, Asda, Sainsbury and the local food giant Hendersons occupying places 2nd, 4th, 8th and 16th respectively in the list. This success makes it all the more difficult to fathom why the Assembly would want to jeopardise the growth of this sector with the announced proposed rates levy on large retail units.
Fears that the entry of the supermarkets to Northern Ireland would simply displace jobs or lead to a net reduction in jobs is not borne out by the evidence of the last 10 years. It is interesting to look back at how employment numbers by the Supermarket chains have grown over this time.
As a reference point I have looked at the Belfast Telegraph Top 100 companies in 2001. This was 5 years after the first entry of the national chains into Northern Ireland and at a time where the supermarkets were in the midst of new store opening programmes. At that time Safeway were represented in Northern Ireland, a chain subsequently taken over by ASDA. In 2001, Tesco, Sainsbury and Safeway (Asda) employed 10,748 staff. Today that figure has risen to 16,250 employees, a 66% increase. The 2011 figures will also not include a number of significant recent new store openings which could easily add another 1000 employees to that figure.
Predictably, the independent sector is nervous about the expansion of the Big 3, but is right to be so. Again the Top 100 List bears out that good quality independent retailers, not only compete, but can grow their own business if their offer is good enough and their business plan is solid. The best example is the local privately owned Henderson Group (Spar/Vivo) with a turnover of over £450 million. It is one of the most dynamic convenience operators in the UK and owns and operates over 70 stores and petrol forecourt sites in Northern Ireland. Hendersons own employment figures in the last 10 years have grown almost in line with the national operators, rising 56 % from 1250 employees in 2001 to 2223 in today’s list.
In his recent budget announcement, finance minister Sammy Wilson stated that he will be looking to extend the small business rate relief scheme and cross subsidising this by applying a levy to large retail properties, including major out of town shopping developments which in his words“have not fared too badly during this downturn compared to our smaller businesses”.
The proposed tax is ill thought out and as shown above, targets one part of the retail sector that should be one of the key sectors in terms of driving investment and job opportunities across Northern Ireland over the next few years. It is erroneous for independent traders to present this as an out-of-town supermarket tax when the reality is it will impact on all types of retailers in all locations. It will target large in town occupiers, such as department stores like House of Fraser, large fashion stores, bulky goods retailers such as IKEA, DIY stores and Garden Centres. There are also many good local businesses who are working hard in difficult times to make a profit who will be surprised to be caught up by this tax because they trade from large units. The tax is indiscriminate.
There is a big danger that if implemented that retailers, who are multi nationals and have a choice, will choose to invest in countries that provide a better return than Northern Ireland. Retailers are currently demonstrating their commitment to Northern Ireland by opening more stores and employing a growing number of local people. It would be terrible to see that growth slowed or halted as a result of the Executive enacting a policy which will make the country a less welcoming place to do business. If the Executive are not careful the tax will lead to a lack of inward investment and many unnecessary closures of shops, leading to a net decrease in rateable income and higher unemployment benefits.
The Independent sector argue that the national chains make millions in profits and can absorb the tax. However one point is clear, multi national retailers are not slow to close loss making branches. It will be a very serious outcome if some high profile retailers choose to close a local branch of a large chain because it is forced into loss by this tax and who will assist hard pressed landlords with their empty rates bills when there are large vacant units in towns centres and shopping malls across Northern Ireland because they are economically not viable to fill.
Taken from articlae in “Belfast Telegraph – Northern Ireland’s Top 100 Companies – March 2011” by Stephen Deyermond
TDK Commercial Property Consultants have, over the past number of months, established themselves at the forefront for Funding Institutions to appoint as Fixed Charge Receiver. The company has been appointed in this role by various banks over 160 commercial and residential units to date.
To view our portfolio of properties follow the Fixed Charge Receiver link on our property search tab, alternatively get in touch with Stephen Deyermond (028 9089 4065) or Ashley Black (028 9089 4068).
TDK have been appointed by leading firm Lomac Properties Ltd to dispose of a warehouse in Annesborough Industrial Estate, Lurgan.
The subject consists of 2 warehouse units totalling c. 36,000 sq. ft. on a site of 5.1 acres. The warehouse is ideally located next to the M1 motorway and is suitable for a variety of uses including commercial and residential redevelopment.
Staying within the town Lomac have also appointed the firm on the Quarry Retail Park with the letting and management instructions as well as to dispose of the surrounding development land.
Mark Thallon, head of retail said, “We anticipate high levels of interest, in particular on the Annesborough Road warehouse, which has excellent links to the local infrastructure in a much sought after location. Quarry Retail Park, located on the main Lurgan to Craigavon corridor has a tenant line up of Tile Market, Toymaster and Jollye’s and we hope to attract further complimentary operators”.
Further to their appointment on their Retail Park portfolio Newbay Properties have recently appointed TDK as Managing Agents of Monaghan Shopping Centre.
The shopping centre has retail space totalling 120,000 sq. ft. and adds to the 800,000 sq. ft. Retail Park portfolio.
Monaghan Shopping Centre is the prime shopping provision in the county. Tenants in the 28 unit scheme including Tesco, Lifestyle Sports, Jack & Jones, Boots, Xtra Vision and Euro 2.
Tanya McKeown, Partner at TDK Commercial Property Consultants commented – “We are proud to have built up an excellent relationship with Newbay Properties and with this latest instruction we look forward to enhancing it further”.