Maughan Mitchell are sad to see local department store Beales, established in Bournemouth in 1881, is facing Administration within days if a buyer cannot be found. This news comes only 2 months after Beales opened their newest store in Fareham, replacing the store which closed in Winchester in August 2016, after 24 years of trading.
Beales’ changing fortunes are undoubtedly a result of changing shopping trends, with a continuing tide towards online. However, the millstone of Business Rates and the inequity in the Business Rates system, penalising those with High Street stores against online retailers, who do not need the same number of physical shops, is certainly a big factor. Of particular concern for retailers will be that in difficult times, for established stores, they are unable to do enough to quickly reduce their property costs, with rent and rates liabilities often being fixed at historically high levels.
Maughan Mitchell feel fundamental changes are needed, both to the Business Rates system, where Transitional Arrangements prevent retailers benefiting from the falling liabilities they should be entitled to and the fact that upward only Rent Reviews, unfairly, remain the normal in most Commercial Leases in the UK. Unless something dramatic changes, to reduce the impact of the unfair costs facing retailers and their ability to adjust quickly to changing trading conditions, this year could be another where we unfortunately see the loss of many more of our favourite High Streets names.
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