"Limited demand" blamed as Next store lies empty for a year

Thursday 22 November 2018

A store that was once one of the jewels in St. Helier's retail crown has now been gathering dust for over a year - and will continue to do so over the crucial Christmas period - due to "limited demand", a lettings agent responsible for the premises has said.

Next moved out of 12,800 sqft Queensway House in November last year to its new King Street store, leaving the windows of the Queen Street store blacked out with signs announcing the new opening on King Street.

But now, exactly one year to the day since their new store opened, those signs remain in place, with no new retailer having entered.

Town Centre Manager Daphne East this month told a panel of politicians tasked with assessing the island's Retail Policy that the clothes retailer was set to pay the lease for the next four years.

Pictured: The Town Centre Manager said she'd like to turn the premises into a space for pop-up shops to add sparkle to town over Christmas.

As Jersey enters the run-up to Christmas, she expressed interest in turning the store into a pop-up shop for small businesses, but nonetheless said she feared that "their [Next's] intention was to leave it as it is."

However, both lettings agents involved with the premises - Buckley and Co and CBRE - denied that was the case.

“There seems to be a story circulating that Next and the landlord are happy with the way things are,” Simon Buckley, Buckley & Co Managing Director, told Express. “Nothing could be further from the truth. Next have a double overhead of two rents – why on earth would they wish to persist with this additional cost? They are very keen to get a deal done and get rid of the lease on Queensway House.”

He added that the landlord had a limited time left with rent coming from Next and that they were “very willing” to reach an agreement with a new tenant. “They would take a surrender of the lease from Next on the back of a new letting to a new occupier,” he confirmed. 

Pictured: Simon Buckley, Managing Director of Buckley & Co, denied Next were deliberately leaving their Queen Street store empty.

CBRE Managing Director Jon Carter said that Next was “as keen as anybody” to see the premises occupied. “Everybody would like to see it reoccupied. It would help this end of town," he commented.

As for the landlord, who is not based in Jersey, Mr Carter said he was unlikely to be "overly worried” about the situation because money is still coming in.

Both letting agents said they received enquiries about the store from UK retailers not currently established in the island, as well as local ones. While none of these discussions have led to a transaction, Mr Buckley said there is still some interest. 

However, Mr Carter explained that there was only “limited demand for something that size", given that it is apparently "over-rented" with rent not being at a “fair market price.”

For him, the fact the store is still not let after 12 months is “a sign of the times.” “The footfall has moved down to King Street, Sand Street, Charing Cross, all that area,” he said. 

Pictured: St. Helier's Constable wants to lower the Retail Tax to 10% instead of 20%.

The new Retail Tax, which sees any profits over £500,000 taxed at 20%, has also previously been cited as a deterrent for new retailers.

In a Retail Policy Scrutiny Panel hearing, Mr Buckley suggested that the new States Assembly should repeal it. “I do not know if that is doing anything more than going backwards,” he stated, adding later that it sent the wrong message to businesses.

While not suggesting scrapping it altogether, St. Helier's Constable, Simon Crowcroft, now wants to slash the rate to 10%. He has published an amendment to the 2019 Budget “to mitigate the damage which is being done to Jersey’s retail sector.” 

In a report outlining his plans, he explained: “Some have said that this tax should be abolished completely until such time as the States has adopted a Retail Strategy, and until its likely effects have been properly researched; to do so would be a welcome stimulus to a crucial sector in the Island’s economy in uncertain and difficult trading conditions.

"However, the majority of firms and retail groups have indicated a willingness to bear the new retail tax were it to be limited to 10%, i.e. the same level that is applied to the financial services sector."