Retail franchises have begun the renovation of the UK high streets
Since the recession in 2008, the number of retail shops on the UK high street has dropped rapidly, with some shop fronts being left unoccupied with short term, quick fix operations taking over. However, retail franchises look set to try and bring the high street back to pre-recession levels of success, but it won’t be easy.
The humble UK high street, once a bustling area full of shops that offered a myriad of products and services from shoe repairs to birthday cakes and everything in between. Trade was booming and customers could spend a morning just browsing the storefronts.
However, in 2008 everything changed. The recession hit the UK high street very hard and suddenly businesses, regardless of size and stature, were entering administration and closing their doors forever.
Even giants of retail such as Woolworths and Comet, were not spared the wrath of an economy tightening their belts and consumers who could no longer afford to spend the same money on non-essential goods. Before long, shops began to close their doors and a once thriving setting quickly became a scene of empty stores and whitewashed windows. In 2013, the cost of the recession to Britain’s retailers was estimated as a massive £23 billion since the start of the recession.
Over the next few years, the high streets slowly became filled with short-term fixes such as pop up shops for food, bookmakers and bureau de change. All of which went as quickly as they had arrived and nothing changed. While all this was going on, a few franchise brands began to come into the high streets, buying up the vacant locations one a time and doing something no-one had been able to do: bucking the recession and turning a profit.
One such brand that not only came through the recession, but also used it as the platform to launch their franchise is Ableworld, The mobility scooter specialist brand. The first Ableworld store opened in 2001 and developed into a chain of 10 company-owned stores in the North West of England, before launching their pilot franchise in 2008.
As people age they require help from the products and services sold through Ableworld’s network of one-stop mobility stores. Products such as mobility scooters, rise-and-recline chairs and stair lifts, as well as a wide range of smaller items designed to make life easier and more comfortable for people as they age. Ableworld’s Franchise Director, Paul Boniface QFP, believes the success seen by the retail franchise is down to an again population: “The UK is seeing a marked increase in the number of elderly people due to the demographic bulge of the so-called baby-boomers born just after the second world war and the fact that thanks to medical advances, people are living longer.”
Ableworld expanded across the country, during a time of economic troubles, and opened retail outlets as far north as Inverness and as far south as Southampton. The brand also has a presence in Wales, Essex, the Midlands and the North West and now has 28 stores nationwide with a further two more on the horizon. Although the company doubled their network of stores during the period 2008-2013 and have added 8 more since then, not all of these have been in the high street as Paul explains: “Most of our outlets are slightly out-of-town due to the better parking facilities (vital for our customer base) and lower rent and rates. We see this trend continuing and our plan is to open at least six to eight a year for the next five years.”
This highlights the biggest problem of any retail outlet looking to trade in the high street; the price of rents and rates for locations in town as Paul adds: “Until the underlying issues of rent/rates and parking are addressed, the traditional high street will continue to experience problems in attracting companies.”
With Ableworld’s demographic ever increasing, the company hopes to continue its stellar growth over the coming years and has a clearly laid out goal of having a mobility super store in or on the outskirts of every reasonably-sized town in the UK. “Our business is increasing year on year. Franchise sales are currently more than 20 per cent up like-for-like on last year and the trend is likely to continue,” concludes Paul.
Another brand paying careful attention to the changes in high street is Aftershock London, a British women’s wear retailer established in 1992 with a global celebrity following which includes The Duchess of Cambridge, Madonna, Jessie J and Jennifer Lopez. The brand offers unique designs and creates stunning, unique and cutting-edge women’s casual wear, eveningwear and accessories. Aftershock London has been a high street franchise since 2004 and currently has 15 store and concessions in the UK and see the potential for up to 30 more locations for the brand.
Dheeraj Harjani, Managing Director of Aftershock London, has highlighted how business levels changed during the recession and how a new approach during that time helped propel the brand forward. “We saw a change in buying volumes during and after the recession, with customers opting for our entry-level price items over the mid-range items. This was expected due to customer’s priorities changing finically. In order to combat the falling revenues across our UK locations, we decided to make some bold changes to our business model.”
With the company having to look carefully at how they could maintain profitability during the financial downturn, steps where taken to ensure the business remained successful. One big step was to outsource their back office for cost savings and recruited more specialists to ensure a much stronger and detailed support for their network of franchise owners. “It was about carefully balancing our books and ensuring we did not end up like other stores who shut their doors during the economic downturn,” explains Dheeraj.
Aftershock London have seen the benefit of being on the UK high street for a number of years now are you looking at expanding onto more high streets around the country, but are worried that due to the high costs of rent and rates, that it would not be as feasible as a shopping centre. “We are actively looking to expand into more high streets across the country but perhaps more so in shopping centres where parking is readily available.
One of the main reasons why high streets are a more cautious option is that we’ve seen many of our competitors closing their locations on the high street and those units being converted to cafes or estate agents, where landlords try to command a higher rental. This then affects our decision to open new high street stores,” cites Dheeraj.
As Dheeraj has said, one of the biggest problems affecting franchises opening up new locations on the high street is down to the expensive rent and rates being charged by landlords but he believes that the British high street is facing a slight resurgence through franchises opting to open new locations: “We have seen franchise owners opting for new locations on the British high street but more so related to food and beverage franchises as opposed to fashion. As I mentioned before the occupancy rate on many high streets across the UK is on the lower side for businesses mainly because rent and rates are too high to justify the current business conditions. Should there be a change in rent and rates then we would certainly see resurgence in more units being occupied.”
However, in London, which perhaps does not entirely reflect the rest of the UK, There has been a number of new foreign brands entering the market over the past year and opting to base their flagship store there. That said, over the past few months, Aftershock London has been receiving a number of enquiries for their franchise opportunities, which according to Dheeraj: “is perhaps one of the reasons why we remain optimistic and believe there is a greater interest in acquiring the franchise for brands to move onto the British high street.”
In the eyes of Aftershock London, high street success can only be achieved through constant communication with its franchise owners and locations across the country. But what is the most important aspect for a franchise to be successful on the high street?
For Dheeraj, it comes down to having a strong and detailed support system for your franchise network. The brand are now working on a Business-to-Business service that their network of franchise owners can access in real time, so that they are able to place, amend and evaluate their orders to ensure they receive the best possible stock package for their stores on time. “This then enables customers to have the latest items and products regularly. We feel that keeping franchise owners updated with new developments is important and it will allow them to ensure their customers are always able to browse and buy our very latest products and seasonal must-haves,” explains Dheeraj.
A profitable high street franchise location is heavily reliant on bringing in continued custom from the local shoppers. Normally this is done through strong advertising or through word of mouth, but Dheeraj believes that there is much more a business can do to bring in custom not just from the local area, but also the wider community as well: “There are several things a franchise can do to help high street areas. A successful franchise can work closely with the local community and also participate in local events, cater to the needs of the catchment area and also create greater awareness for the area around it.”
Sometimes it depends on the market sector or industry in which the franchise operates, but more often than not there is no doubt that a successful franchise will help the high street shopping area become more popular. Job creation is, of course, always going to help stimulate a high street as well as bringing a new store to a location will build interest from shoppers.