Sports Direct IOM

[TheTeapot]

I needed a beer too. I've had one now. You should have one too.

[woolley]

Retail has changed out of all recognition since the Strand Centre opened and the tenants and reasons for success or failure have been many and various.

Harrison Musique did well in the early days and sold out to HMV who also did well for a time. The fact that everyone got used to ripping music of the internet for nothing and buying games etc. online from the Channel Islands with no VAT cannot be blamed on the Strand. Even then, the IOM shop survived a few culls in the HMV network before finally succumbing. Probably pleased to get away from the commitment in the end.

The bookstore at the back (name escapes me) always seemed to be empty. Can't imagine that ever turned a profit. Market overtaken online, notably by Amazon.

Peacocks have probably done OK over the years. It's a certain offering to a demographic that still works in a bricks and mortar shop.

I know that Card Factory is extremely successful, but then it's another cheap and cheerful offering and has an entrance onto the street. I bet the competitor shop at the back of it was well chuffed when they arrived.

Mothercare is reckoned to have shut due to a lack of babies and young children on the Island. Probably true, allied with a tired business model and cheaper online competition, likewise Tandy.

ModelTech was a great little shop nicely run, but viable in there?

MEA should never have gone in. Shocking move, but then it's only taxpayers money.

In the days of the internet and tight cash, you need to have a massive brand, stonking idea or nerves of steel, and preferably all three, to contemplate a substantial investment in any form of shop business nowadays.

 

[thesultanofsheight]

I wouldn't disagree with you there on internet sales Woolley which to me makes it look odd that JD think that investing millions into the Strand will reap them any better return than they're getting at the moment off internet sales from the IOM. Especially if Flannels is flogging £600 pairs of jeans that very few people will be buying. Surely that sort of low volume high value stuff shifts better off the internet and at a better margin. It's a huge amount of capital to tie up when it is proven that the footfall isn't as high as they'd get out of most city centre shops on a standard UK High Street. Disposable incomes are a bit lower here too due to the high cost of living and utility costs, high rents and mortgages, and relatively low average wages. 

[Dave Hedgehog]

I wonder if there will be some kind of tax beneficial IoM based corporate restructuring going on.

[notwell]

18 minutes ago, thesultanofsheight said:

I wouldn't disagree with you there on internet sales Woolley which to me makes it look odd that JD think that investing millions into the Strand will reap them any better return than they're getting at the moment off internet sales from the IOM. Especially if Flannels is flogging £600 pairs of jeans that very few people will be buying. Surely that sort of low volume high value stuff shifts better off the internet and at a better margin. It's a huge amount of capital to tie up when it is proven that the footfall isn't as high as they'd get out of most city centre shops on a standard UK High Street. Disposable incomes are a bit lower here too due to the high cost of living and utility costs, high rents and mortgages, and relatively low average wages. 

That level ticket of jeans will occupy a small part of the retail experience in that shop.  There are people on the island with the money to pay those prices.   Whilst the internet has a place clothes shopping is primarily a user experience thing and a social thing.  The internet compliments the offering.   People still want to physically walk into shops and browse, try and buy.  Not everyone is skint either.  

Also internet sales from the Isle of Man are maybe one of the main reasons it is attractive - because it's a market they have little or no penetration in?

Also, the investment might end up at nothing and actually return them a profit . A company here recently bought a sizeable premises for a couple of million, fitted it out for another million, relocated their staff, put a 20 year lease in place and sold it for 7m.   I don't think SD are huge property owners as a group.  

The island is a lucrative place for many major stores. Nothing to do with tax avoidance.  They don't need a major presence here to do that.

 

 

[John Wright]

The property was cheap. Money in the bank earns next to nothing. They get a capital asset, they occupy at market rent, from one hand to the other, or low rent. They're quids in either way. Better return than bank, or rent free. They have spare units they can rent out. They improve footfall dramatically, the value of the centre shoots up. 

Thats my read.

now for nottie. You claimed footfall was good. It wasn't, and was deteriorating, it was. You claimed that was because the centre was burdened with debt, rents were high, so tenants didn't stay. The fact is that the leases predated the debt laden leveraged owner, they predated the 2008 crash. Most unit's became empty because the businesses failed or didn't renew.

That then becomes a spiral, new tenants are reluctant to move in, empty units, footfall drops further, the value of a commercial centre is based on rent roll, as much as location and size. Value falls, you breach your banking covenants, you go into administration. 

Administrators sell cheap, someone gets a bargain. 

[Neil Down]

29 minutes ago, John Wright said:

The property was cheap. Money in the bank earns next to nothing. They get a capital asset, they occupy at market rent, from one hand to the other, or low rent. They're quids in either way. Better return than bank, or rent free. They have spare units they can rent out. They improve footfall dramatically, the value of the centre shoots up. 

Thats my read.

now for nottie. You claimed footfall was good. It wasn't, and was deteriorating, it was. You claimed that was because the centre was burdened with debt, rents were high, so tenants didn't stay. The fact is that the leases predated the debt laden leveraged owner, they predated the 2008 crash. Most unit's became empty because the businesses failed or didn't renew.

That then becomes a spiral, new tenants are reluctant to move in, empty units, footfall drops further, the value of a commercial centre is based on rent roll, as much as location and size. Value falls, you breach your banking covenants, you go into administration. 

Administrators sell cheap, someone gets a bargain. 

You do realise you just wasted your time there John

[sarahc]

Once Boots and M&S got escalators there wasn't any real reason to visit. 

[dilligaf]

4 minutes ago, sarahc said:

Once Boots and M&S got escalators there wasn't any real reason to visit. 

I've had a tiring week and I'm a little slow perhaps, but WTF does that mean ?

[John Wright]

Come on dilli, you must remember Strand Centre had the first up and down escalators on iom

[sarahc]

3 minutes ago, John Wright said:

Come on dilli, you must remember Strand Centre had the first up and down escalators on iom

All we  people did was go up and down the escalators when it opened, or ride in the glass lift. Once the novelty wore off there was no reason to visit. 

[dilligaf]

1 minute ago, sarahc said:

6 minutes ago, John Wright said:

Come on dilli, you must remember Strand Centre had the first up and down escalators on iom

All we  people did was go up and down the escalators when it opened, or ride in the glass lift. Once the novelty wore off there was no reason to visit.

Ah, the penny has slowly dropped.

I'll probably look stupid again now by saying that I don't think The Strand did have the first escalator. Did it ?

[sarahc]

But nowhere had up and down ones, that you could jump over half way up. 

[Uhtred]

3 minutes ago, sarahc said:

But nowhere had up and down ones, that you could jump over half way up. 

You devil you!

[John Wright]

18 minutes ago, dilligaf said:

Ah, the penny has slowly dropped.

I'll probably look stupid again now by saying that I don't think The Strand did have the first escalator. Did it ?

No, old M&S had an up, but no down.