The first six months of the year will continue to be difficult for the retail sector after a challenging 2018, but the second half of 2019 will see a positive change as a kind of ‘natural selection’ takes place which brings the best assets to the top, David Atkins, Chief Executive, Hammerson, told Real Estate Day.
‘We need to understand that retail is not dead but it is undergoing a transition,’ he said. ‘2018 has been a pretty difficult year for the retail sector as a whole, and in 2019 for the first half of the year I’m afraid we are going to see a continuation of retail difficulties. We have seen a lot of failures last year and we will see a continuation of that.’
But it is not all doom and gloom, he said: ‘We will see the best retail assets and the best managers coming to the fore. What’s important is to define future retail. You need to add digital capabilities into these centres, improving the experience and having the very best retailers to animate the centres and make the destination really prosperous into the future, whether it’s a long-term destination or a short-term pop-up.’
There is room for different solutions and propositions, he said, but Hammerson’s bet is that outlets will continue doing well.
‘Outlets are really a retail tourism business, more linked to the hospitality and travel sectors than it is to retail,’ he said. ‘We are a big investor in outlets, they are about 25% of our business across 13 European countries.’
The best luxury brands are still trading very well in all the outlets, he said: ‘We have seen high single digit sales every year for the last ten years. We predict that that will continue and we are delighted to be in this sector’.
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