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Since various British retailers were forced to close outlets or even went bankrupt in the past few years, shopping malls are getting into trouble as well: they are trapped in a downward spiral.
Smaller towns
Over 200 shopping centres in the United Kingdom are facing bankruptcy because their anchor stores have closed shop. Shopping centres in smaller towns are particularly at risk, retail analyst Nelson Blackley of the National Research Knowledge Exchange Centre says. He points to the impact of recent difficulties at large retailers such as BHS and Toys ‘R’ Us. The bankruptcy of BHS alone caused empty units in over 200 shopping centres.
The majority of shopping centres at risk are in the hands of American private equity companies. They are forced to either sell the real estate at a lower price or to invest in a revival of the centres – which seems unlikely because the banks will not co-operate. If shopping centres have to close down, it can have major social consequences, not only in terms of employment – but also crime.
The British retail market has seen a lot of deterioration lately: New Look, Mothercare and Marks & Spencer are among those who have been announcing closures and terminations. The same is happening at Poundland and House of Fraser. Earlier this year, Carpetright announced that it will have to close 1 out of every 5 outlets in the UK. Debenhams recently announced the closure of five outlets.
