If there is one thing that everyone in UK retail agrees on, it is that the “nation of shopkeepers” has too many shops. From the British Retail Consortium to the Local Government Association, there is also broad agreement that the high streets of the future will have fewer of them.

But few people think shops will completely disappear. “It’s not Armageddon retail, it’s reinvention retail,” BRC chair Helen Dickinson told the group’s annual conference. She pointed to a future where shops do a range of jobs, over and above just selling things.

While a stream of well known UK retailers have announced emergency fundraisings or “ company voluntary arrangements” with landlords to ease financial pressure by reducing rents and closing stores, some shops continue to prosper. Here are some of the factors that have helped them do so.

Be cheap

It is difficult for online retailers to sell items at low prices with free delivery at decent margins. Since the financial crisis, discount chains such as Poundland and B&M have taken advantage of this gap and expanded rapidly.

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B&M does not sell online at all, but this has not hurt its growth; UK store numbers have risen to 578, this week the group said 45 will open in its current financial year and the eventual target is 950. The company attracts customers with offers on homewares, toys, DIY and seasonal items. “We want to be the Aldi and Lidl of these categories,” said Simon Arora, chief executive. Like the discount grocers, B&M sells a relatively narrow range of items in large volumes. “There is no embarrassment about buying from discounters these days,” he added.

Be personal

Brendon Urie might not be a household name in the UK. But on a muggy evening in May, several hundred fans waited outside HMV’s Oxford Street branch to meet the lead singer of Panic! At the Disco. The 400 free tickets to the event were snapped up inside half an hour.

HMV, bought out of administration by Hilco in 2013, has always run events. But Simon Winter, senior events manager at the company, said they have become more frequent and featured a bigger range of artists — from Snow Patrol to Sir Cliff Richard. Events build loyalty and give shoppers more reasons to visit stores.

Laura and her 10-year-old daughter Hayley travelled from Bedfordshire to see Urie, and have been to about a dozen signings. Some include performances. “It’s a great way for children to see live music when they’re too young to go to concerts,” she said.

Be local

On a Saturday afternoon 40 miles east of London, the scene in Waterstones’ Southend branch is rather more genteel. Patricia Volante is signing copies of her history of a local ice-cream maker. The seaside town has a higher-than-average proportion of older residents, so local history titles sell well and the store has an extensive collection of them.

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Giving local store managers the freedom to sell books tailored to local audiences was a key part of Waterstones’ strategy after it was acquired by Russian oligarch Alexander Mamut in 2011.

“We turned the traditional idea of chain-store retailing on its head,” said James Daunt, the former investment banker put in charge of the group. He closed stores as the company fought for survival in 2011 and 2012, but with profitability restored and the group now majority-owned by the private equity arm of Elliott Management, believes he can start opening new ones. “We believe we can run bookshops in any high street location.”

Be exclusive

Nike and Adidas, whose combined market value easily exceeds £100bn, openly state that they want to sell more products direct to consumers. Yet they shower praise on UK chain JD Sports, a £4.5bn company that has emerged as a key distribution partner for both.

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Having the latest designs is important for aficionados of sporting footwear, and JD regularly gets new lines before anyone else, courtesy of its carefully cultivated relations with big suppliers. That, and the well-designed stores, are what executive chairman Peter Cowgill believes keep JD ahead of rivals.

The company has also benefited from being in the fast-growing “athleisure” market, and its younger customers who tend to spend a higher portion of their income on clothing and footwear. That has helped its UK store numbers expand from 332 in 2013 to 385 now — not including the outdoor brands it owns, such as Blacks, Millets and Go Outdoors.

Be a brand

Picture shows the Ted Baker store in Regent Street, London. PHOTOGRAPH BY DANIEL JONES 2016 07815 853503 info@danieljonesphotography.co.uk www.danieljonesphotography.co.uk
Ted Baker has carved out its own well-defined niche © Daniel Jones

“Please take care of Ted,” state the labels on some Ted Baker garments. The company has heeded its own advice. “They have preserved the brand magnificently over a very long period of time,” said Peel Hunt analyst Jonathan Pritchard. Expansion has been similarly cautious; the company has only 20 directly operated UK stores, preferring to sell through concessions in department stores and wholesale channels and license its brand into sector such as eyewear and toiletries.

Be dominant

The UK’s biggest clothing retailers have market shares of under 7 per cent each. In DIY and electronics, the market leaders have about 20 per cent. Compare that to Specsavers: the Guernsey-based chain of opticians has two-fifths of the UK market, its conquest of high streets helped by a partnership model in which store managers keep their profits less the fees paid to the central business. Like JD Sports, much of its expansion efforts are now focused overseas — but it nevertheless opened 33 UK stores in 2017.

Be flexible

Retailers become distressed for a variety of reasons. But excess debt and a surfeit of shops in the wrong places are almost always among them. Retailers with adaptable store estates and modest debts are more likely to be able to cope with short-term shocks and take advantage of opportunities. The poster child here is Next; net debt rarely exceeds annual earnings (before interest, tax, depreciation and amortisation) while over half its leases expire within 10 years.

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