Retail design to stay strong, despite downturn

While retail design may be slowing, industry figures say the situation will not be as bad as the last recession, says Angus Montgomery

Prime Minister Gordon Brown and Bank of England Governor Mervyn King have both finally admitted that the UK is heading for a recession. Meanwhile, retailers are battening down the hatches as they enter the key Christmas trading period, with predictions of only a very weak year-on-year growth in retail spend.

Research by retail analyst Verdict Research suggests that UK consumers will spend £82.3bn with retailers in the final quarter of 2008, an increase of just 2 per cent on the same period last year. This prediction comes after a year in which nearly 20 high street chains have collapsed into administration, including MFI, Rosebys and Dolcis.

The knock-on effect is already being felt by retail designers, with Marks & Spencer understood to be making about three-quarters of its property and store design teams redundant as it puts expansion plans on hold.

But according to designers who worked through the recession of the late 1980s and early 1990s, the spectre of a repeat of that situation, in which the UK high street was brought to its knees and retail design completely froze up, is still a long way off.

Steve Collis, managing director of JHP Design, whose clients in the early 1990s included such high street staples as Miss Selfridge, Elan and Burton, describes the times. ‘Things just completely stopped,’ he says. ‘Those design groups which were wedded to the high street disappeared – it was like myxomatosis wiping out all those designers who were less fortunate.’

He adds, ‘Immediately prior to the recession, the retail world had whipped itself up so much that people were refitting every 18 months or so. When the recession hit it went down to every five years or so.

‘Back then the design industry was a little naive – very strong creatively, but less so in business terms.’

David Anderson, director of Cada Design Group, which was set up in the middle of the previous recession with a contract to design the Harrods food hall, says he doesn’t see an equation between the economic climate of the early 1990s and the situation that currently faces retail designers.

He says, ‘We now have some very smart and well-connected retailers. What you will find is that in the early part of 2009, the strong retailers who have suspended their activities will now be developing, as there will be a lot of property coming on to the market as weaker retailers go under.’

Dalziel & Pow creative director David Dalziel, who was the brains behind Chelsea Girl’s rebranding into River Island during the previous recession, agrees, and suggests that while some retailers are putting development on hold at the moment, others are taking a different view, ‘preferring to capitalise at this time with landlord contributions, reduced shopfit costs and cheaper advertising costs working in their favour’.

Arcadia boss Sir Philip Green, who fits Anderson’s profile of a strong retailer, has announced plans to double the size of his Topman and Topshop chains, despite reporting a 6 per cent decline in Arcadia’s operating profit this year.

Dalziel also points out that few design companies are purely wedded to the British high street in the way that they were during the previous recession. Dalziel & Pow now operates in China, India, Europe and the US, which will allow it to ‘fill in any minor cracks’ that appear in its UK workload, says Dalziel.

Anderson says that while there might be a spate of new retail outlets in the pipeline, there is unlikely to be much major design work done to those that are already open – just like in the previous recession.

He says, ‘What you will find is people trying to stretch the life cycle of shopfits, and finding ways of low-cost in-store refreshments, not architectural fit-outs.’ He adds, ‘Above-the-line advertising spend will be diverted into retail marketing, and retailers will focus on the promotion of the product in store.’

Dalziel predicts that we are set for ‘a new austerity’ stylistically. He adds, ‘Nostalgia and nature will reappear, where glamour has dominated in recent years. Customers may take comfort in shopping, dwelling longer and spending less.’

One of the places they will be enjoying shopping will be the Westfield White City shopping centre, which opens tomorrow with a Jack Morton Worldwide-choreographed launch party. Collis predicts that Westfield could become the retail equivalent of Canary Wharf in the early 1990s.

He says, ‘Back then everyone thought the idea of moving out to London Docklands was crazy, but after a couple of years it became successful. Westfield has picked up the retail centre of London and moved it from Oxford Street to Shepherd’s Bush, and, like Canary Wharf, it’s happening at the start of a recession.’

Retail designers’ predictions for the future
• Strong retailers will expand as weaker companies go bust

• Retailers will stretch the life cycle of shopfits

• ‘A new austerity’ will appear stylistically

• Above-the-line advertising spend will be diverted into retail marketing, and retailers will focus on in-store promotion

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