With fall in consumer demand over the recent recession and the steep increase in online shopping, retailers (and their surplus stores) are an obvious target for our team.
Barry Knight, a retail guru, has recently joined the Legacy Team; here he gives us the low-down on his experience of this challenged sector and an introduction to Legacy Retail.
Until recently I was Head of Retail at Grant Thornton, the professional services firm. Up to then I had spent over 20 years in the retail industry in roles ranging from Deputy Finance Director at Boots to working with specialist restructuring firms such as GA Europe and Hilco, the latter when we closed Littlewoods Stores.
Four years ago I met Alexander Anton, the Chairman of Legacy Portfolio, who was just completing a transaction in which Legacy would assume all the financial risk of Wolseley UK’s dark stores (i.e. no trading). This amounted to 177 properties in total.
I quickly realised the importance of such a product to the retail sector not just in the UK but globally. Given the move from consumers visiting stores to shopping on line, there is virtually no retailer that does not have stores they wish to exit. The Legacy Retail offering is able to provide certainty as to the cost of doing so.
Alexander and I re-established contact two years ago when Grant Thornton worked with a major UK retailer to close a number of sites. Underpinning it was the ability of Legacy to assume the property risk.
Although the transaction never completed it was fascinating from the perspective of looking at the cost of exiting property and the benefits from doing so in one go. Not just the financial benefits but operationally as well, such as allowing management to focus on their core business, rather than worrying about the escalating property costs and the negative impact on the brand from the empty stores. It also threw up some interesting issues such as exiting marginal stores where the landlord would pay a premium!
The issue facing Alexander has been that, in the case of retailers, there was a need to have in situ someone with deep knowledge of the sector. The issues retailers face on closing stores are numerous, property, staff, stock, logistics and so forth. I can speak retailer’s language and hence decided to join the team to develop Legacy Retail.
To find out more – get in touch. For now, watch this space!