Commercial Property Blog
All posts from: May 2012
Clintons: Shoplifters of the world unite
The Smiths song ‘Unhappy Birthday’ opened with the lyrics: “I’ve come to wish you an unhappy birthday / Because you’re evil and you lie / And if you should die / I may be rather sad, but I won’t cry.”
That was how most people felt when Clintons finally folded yesterday.
The 44-year-old retailer - named after founder Don Lewin’s son, Clinton - was as much a part of Britain’s social fabric as Kenny Dalglish and Maggie Thatcher. Like Morrissey, they all enjoyed their peak periods in the eighties. (And are seemingly also living in denial for some time as well.)
But while King Kenny is still fondly remembered by the Reds as Thatcher is by the Blues, the nation’s favourite card store seems to have folded with all the joyful whoops rusually reserved for the kind of tabloid-drubbing dished out to Rebekah Brooks.
Perhaps it was because this – more than any previous administration – had been such a long time coming. There wasn’t a landlord, investor or journalist who hadn’t seen the crows circling since Birthdays was put into administration three years ago, almost to the day.
What was almost as amazing, was the hilarious spin machine put into action (probably by the administrators’ PRs) that placed rumours that WHSmith was apparently “considering” a bid for Clintons. Having successfully pulled rabbits out of hats year after year, Kate Swann, on what must surely be a similar knife-edge of dwindling consumer demand, would surely be nuts to take on more high street exposure?
It was what Clintons did when it splashed out over £46m on Birthdays in 2004, let us not forget, in spite of the internet clearly starting to hit traditional postal greetings. When Clintons put the firm into administration just five years later, the writing was on the wall with a giant great bunny stapled to the front.
And while this went on, with debts being run up all over the show, why was no restructuring put in place then?
Some have criticised the banks for displaying this same lack of ‘moral responsibility’ pulling funding. Indeed, there’s a large dose of irony seeing the slivery George Osborne bang on about supporting British firms while our State-backed banks fund private equity groups as they asset-strip once successful businesses, having pulled the rug from the principle company executives.
But when your shareholders are the public and the retailer is so clearly buried, it’s a hard for one to argue.
Of course, the major problem was Clintons’ paying over the odds for plump spots on the high street – something American Greetings clearly needed to fix when it bought the company and subsequently called in its debts. And with other firms teetering on the edge over the summer, the rebasing of high street rental values could continue for some time.
At the end of the day, successful enterprise comes down to the balance of risks. The current insolvency epidemic swings that too far in one direction. A large creditor higher up the food chain may get a few million pounds, while SME unsecured creditors will be lucky to get paid anything. The hit for them will be far worse as a result.
If no one can trust anyone to pay, that itself undermines the very enterprise we keep telling ourselves will get us out of recession. If we’re serious, maybe we need to change the record on insolvency regulation?
With a countdown of just 72 days to the London Olympics, my week has been something of a marathon.
Still not quite in the Olympic spirit? Then I suggest seeing Chariots of Fire just opened at Hampstead Theatre which as you will know from the film of that name is based on the 1924 Olympics.
This inspiring and energetic production prompted a standing ovation and outpouring of a patriotic rendition of Jerusalem. It's well worth going to limber up for our Olympic summer.
I also paddled round (in the rain) the newly completed development at the wonderful Regents Park Open Air Theatre paid made possible by the fund raising efforts of the development committee, of which I was a member, chaired by Savills' Rupert Sebag-Montefiore.
For a truly magical and quintessentially English experience book now as the new season starts shortly and includes Midsummer Night's Dream. I'm told we will have a summer…. eventually!
This week's British Property Federation annual conference 'The road to 2020' was well attended and once again ably chaired by the BBC Today Programme's Sarah Montague who has become a popular fixture on the property circuit.
She was joined by after lunch speaker, BBC Economics editor Stephanie Flanders who it has to be said made some fairly dampening comments on the economy.
But on a slightly positive note, she felt that property can be part of the solution to UK economic crisis.
She pointed out that in 1934 the private sector built its way out of recession with 293,000 new homes (about triple last year's output). Underlining the extent of world turmoil she pointed out that a whopping 40% of world GDP is changing hands politically this year.
Looking on the 'glass half full' side in response to the inevitable question of when will the economic crisis end, she gamely opined that if we never get out of it we won't notice as this will become the new normality.
And will the euro survive? 'Yes but it won't necessarily work!' The panel sessions which produced some interesting conversations were controlled by Sarah Montague with her usual aplomb referring in passing to the property sector's 'tortured' relationship with the banks.
For light relief the week did contain a number of dinners, one in a particularly buzzy Mayfair restaurant where we had the unexpected bonus of being seated at the next table to the glamorous Gwyneth Paltrow and her musician husband.
I am pleased to report that one of our group Harvey Soning sprung into impressively chivalrous action to return Ms Paltrow's serviette within a nanosecond of it dropping to the floor. I'd like to think I'd get the same response.
During the week I was taken round the Kings Cross redevelopment (also in the rain but even the weather didn't detract from the experience).
This was my first visit since the early days of the original King's Cross Partnership think tank when our blue-sky thinking envisaged such revolutionary concepts as 24/7 shopping.
The forward to 'Stories' a beautifully illustrated book about the history and transformation of King's Cross starts 'Cities are made of stories and storeys.'
It is great to see the vision unfolding with the unique blend of heritage and award winning new buildings.
The 67 acre development provides 8 million square feet of mixed use space to include 2000 new homes and 40% of land will be open space.
Central St Martins are now well ensconced in their brand new home and the artistically attired students provide a colourful addition to the urban landscape.
In fact we are missing them in Holborn, their former home. And I never thought I would enthuse about a station but it has to be said that the revamped Kings Cross station with its John McAslan designed canopy is extremely impressive.
Although requiring a 7.30am start, the Jewish Care Property Investment Breakfast at the Dorchester Hotel was well worth the effort.
The guest speaker, Lord Alan Sugar, definitely didn't disappoint in a sparkling Q&A session chaired by property doyen, Philip Lewis.
Sugar described Twitter as 'a great tool but you have to know how to use it'. I don't disagree and it has to be said that he employs it very well.
He claimed not to know much about property which he dismissed as 'pretty boring' and 'not rocket science' although I'm not sure the audience were totally convinced.
And do you want to know what drives him personally? Unquestionably it's new technology and innovation.
He also made a telling point about the Americans being generally more positive in their outlook. He's noticed that they say things are better and eventually convince themselves that they are.
The power of positive thought! Maybe we can use it to improve the weather.
To end on the Olympic theme, Lord Sugar sees the Olympics as 'good for Britain' although that’s not to say he's going to venture out during the Games as he says he'd rather stay home and watch 'on the telly.'