The recent announcement from Intu stating that it anticipates raising an additional £1bn from shareholders to ‘fix’ the balance sheet, is an interesting insight into to vicious cycle that is gripping and possibly choking the retail sector.
Store retailers are struggling to survive with rents at the current levels, but landlords are unable to reduce rents due to investor demands and, in the case of Intu, a debt mountain that must to be serviced.
Are we witnessing a prolonged reset of high street retail that will allow things to go back to normal, or is the sector evolving into something rather different? My visit this past weekend, to the superb recently refurbished Watford Intu gave tangible meaning to the term ‘leisure retail’, with as many restaurants and coffee shops as brand stores. Oh and did I mention the fantastic, huge IMAX cinema?
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