Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
Issue link: https://sct.epubxp.com/i/122387
r e T a i l i n g T o d a y when it took over HMV's Canadian operations in 2011. The more entrenched digital became, the worse things got for HMV. The company's shares fell from 80 pence in 2005 to 1 penny at the beginning of this year. Some argue that HMV would in fact have collapsed sooner had it not been for the earlier failures of Woolworths 120 SCT / M a y 2 0 1 3 and Virgin Megastores, which left fewer physical outlets for games, CDs and DVDs in Britain. The company might have been able to make the transition to a digital age if it had moved sooner, says Philip Beeching, whose ad agency handled HMV's account in the 1990s. "Who was better placed to exploit the Internet than HMV? The power of the brand, their heritage in music, their unrivalled access to content from film, game and music companies," wrote Beeching in a blog. "Who would now have been better placed to take advantage of social media?" Things were looking bleak for landlords, until the Hilco deal. Supermarket chain Morrisons bought six vacated HMV stores to convert to M Local stores, but otherwise, what would have become of the vacated spaces was largely unclear. "I think landlords will struggle to fill the space left by HMV's closures, owing to the current economic trends, which are seeing retailers opt to operate fewer stores, subsidized by a much stronger online and multichannel offering," said Byfield-Green, before the Hilco deal. Many High Street shops had it tough last year. One store closed every hour in Britain during the 12 months ended this past February, according to British market research firm Local Data Co., which released a study with PriceWaterhouseCoopers. The total number over that period was 1,779 stores, ten times higher than the comparable period the year before. The firm estimates that town center shop vacancies stood at 14.2 percent nationwide at the end of December, and 15 percent for shopping centers. Nationally, landlords earned a 2.7 percent total return on assets overall in the first 11 months of 2012, but rents sank 0.1 percent, and capital values fell 3.7 percent, according to Jones Lang LaSalle. About 140 national chains were in significant financial distress as of December, according to Begbies Traynor Group, a consulting firm specializing in recovery and insolvency. Showrooming — the growing habit among consumers to look at an item inside a store and then get on a smartphone to find out where it can be had for less — is one factor behind this reality. SCT