As sales migrate online, Marks & Spencer aims to revamp and monetize its Oxford Street store.
A new plan proposes to knock down and rebuild the leased flagship site to house the British retailer’s store in five of the 10 floors, with the balance earmarked for office space and other future tenants. The plan for the location, which combines three buildings, isn’t official yet, and remains a proposal pending feedback from stakeholders and other groups. An M&S spokesperson did not respond to a request for comment.
Many fellow merchants in the U.K. have similarly moved to maximize the profitability of their brick-and-mortar investments.
John Lewis & Partners said in October that it too was switching some store square footage to office space. About 40 percent of its Oxford Street store site will be converted to offices. The company at the time said it had received approval from the Westminster City Council for the planned change.
High-street retailers have been hard hit by the coronavirus pandemic. Many stores never recovered from coronavirus closures, and several retail nameplates—such as Debenhams and Topshop and Topman parent Arcadia fell into administration. Debenhams shuttered its Oxford Street flagship in January. Boohoo acquired some of Debenhams’ assets but not the stores. And Asos bought the Topshop and Topman assets, but left the stores behind. The two transactions are expected to shutter 500 stores in the U.K., and result in job losses of 25,000 on top of the positions already lost during bankruptcy. Retailers have also been looking at changing their leases from set monthly fees to sales-based arrangements that better reflect the new reality.
Across the pond, Macy’s has also been looking at how best to cash in on its brick-and-mortar footprint. At a Bank of America Securities Consumer and Retail Technology Conference on Tuesday, Macy’s CEO Jeff Gennette said there were “opportunities to monetize the real estate” at its iconic Herald Square flagship in Manhattan, floating the idea of developing an office tower. The move would not reduce its selling space.
The idea of an office tower was first proposed in February last year when Macy’s unveiled its three-year Polaris strategy, which also included the closure of 125 stores over a three-year period. The proposal calls for a 900-foot skyscraper to be built on top of its Manhattan flagship that would house office space. It still requires city approval before the plan can move forward.