Shopping centre giant collapses
The demise of Intu threatens 14 malls . . . and thousands of jobs
SOME of Britain’s biggest shopping centres face closure, which threatens to pull the shutters down on a retail recovery.
The intu group, owner of 14 centres across the UK – including lakeside in Essex and the Trafford Centre in Manchester – has plunged into administration.
The problems at intu puts more than 100,000 jobs in jeopardy.
Boris Johnson ( pictured) responded to the news by promising support for retailers. Asked if he would intervene, he said: ‘Shopping malls have been feeling the squeeze and we will do everything we can to look after them.’
There are concerns that intu shopping centres may have to shut, at least temporarily, while administrators attempt to find buyers.
Some of its more famous sites are likely to be sold, while others could be lost forever.
This would be a disaster for thousands of families and many local economies. For example, a retail centre in Watford employs 10pc of the area’s entire local workforce.
The lockdown of shops since the end of March has fuelled a retail crisis that was already decimating High Street and retail centres with a switch to online shopping.
Many of its high profile tenants, such as Debenhams, House of Fraser and Topshop, have closed stores, while thousands of others have stopped paying rents.
it emerged this week that UK retailers have paid just 13.8pc of the rent owed to their landlords to cover the next three months.
The failure of intu comes at the same time the government is hoping that an easing of the lockdown, and a return to shopping, will breathe life into the economy after the pandemic.
The crisis in retail, which is expected to see many more stores boarded up in the coming weeks and months, has turned the balance sheet at intu red. its latest annual report points to an annual loss of £2bn and debts of £4.5bn. Against that, the company’s market value is estimated at less than £30m. Yesterday, the group’s shares fell 54.6pc, or 2.13p, to just 1.78p, taking the stock’s losses during the past 12 months to 98pc. Chief executive of data provider Retail Economics, Richard lim, said: ‘While the collapse has been highly anticipated, its significance cannot be understated. Many retail landlords remain stuck in an age of analogue retailing, sluggish to adapt their business model to the inevitable impact of online and evolution in consumer behaviour.
‘Permanent changes in the way people work, travel and communicate will also create further challenges for destinations reliant on high levels of footfall from office workers.’
Jim Tucker, David Pike and Mike Pink from KPMg’s restructuring practice have been appointed joint administrators for intu Properties.
KPMg said all the shopping centres will remain open and operational while the joint administrators assess options.
Tucker said: ‘The challenges affecting UK retail are well known and have been exacerbated by the impact of Covid-19 and the resulting lockdown.
‘As today’s administration makes clear, those challenges have fed through to owners of retail property, even to owners of high- quality shopping centres such as intu’s.’
And Pike added last night: ‘With all centres remaining open, we look forward to working with staff, suppliers and other key stakeholders to preserve value and jobs in these important retail destinations.’