What’s happening to the old Topshop in Church Street, why shops that don’t sell stuff are part of the future and how M&S almost left Liverpool… Liverpool ONE boss reveals all in interview with LBN. Tony McDonough reports
“Bricks and mortar retail isn’t dying, it’s evolving,” is something you might reasonably expect a man who runs a £1bn retail complex to say.
And Iain Finlayson, estate director at Liverpool ONE, doesn’t disappoint on that score. But there is a wealth of evidence to back up his claim.
Liverpool BID Company, which looks after the retail district outside of the Liverpool ONE estate, is consistently reporting city centre footfall figures that outperform many other areas of the country.
And in Liverpool ONE itself people are flocking in greater numbers. The estate, operated by London property giant Grosvenor, has just enjoyed the best footfall figures in the first few weeks of a year since 2018. It had a record Christmas and is regularly announcing new tenants.
However, Iain argues that now, more than ever, the retail and leisure sectors cannot afford to be complacent. He explained: “Early signs are there from the retailers that 2024 will be good.
“But we have to work a lot harder now than we did pre-pandemic. There are so many other things for people to see and do and go to. And we are in a cost-of-living crisis – we must never lose sight of that. The money in peoples’ pockets isn’t what it was.”
Iain points to the big retail names that have vanished from the high street in recent years – Debenhams, Topshop BHS, Oasis, JJB Sports – although some brands have survived online. He added: “Back in the 1990s we never expected them not to be there.”
When Liverpool ONE opened in 2008 it was the two big anchor tenants – John Lewis and Debenhams – that drove footfall to the complex. However, now he insists that is changing rapidly and it is the more “agile” and fast-evolving brands that are bringing people in.
But he also reveals how the loss of one big beast brand, Debenhams, gave Grosvenor the opportunity to keep another big brand in the city.
Marks & Spencer’s relocation from its longtime home in Church Street to 70,000 sq ft of the former Debenhams store last summer has been well documented. But what hasn’t been revealed, until now, was that M&S was considering leaving Liverpool altogether.
Iain told LBN: “M&S were planning to leave the city centre in line with their retail park strategy which has seen investment in locations such as Aintree and Ellesmere Port. The costs of running their old building in Church Street had simply become prohibitive.
“They’ve left quite a few city centres across the country in-line with this strategy. We were fortunate to persuade them that Liverpool city centre is still a really good option. Safe to say all parties concerned are delighted with how things have turned out.”
Debenhams closed for the final time in May 2021 but its demise as a high street entity (it survives online) had been on the cards for some time before that. Grosvenor had anticipated this and was already working to fill the space.
That strategy paid off. As well as M&S, the building is now also occupied by Gravity Max, a £10m leisure venue that includes a go-kart track.
“We could have gone to retail on all floors,” explained Iain. “But it would have to have been a couple of retailers because there aren’t many single retailers in the market that will take a space as big as that.
“We wanted something in there that was experiential. Because that is where the growth is. Post-pandemic people want to live their lives and do things. They spent so much time indoors during lockdown so that demand for ‘experiences’ has grown exponentially.”
Another big space that has proved tricky to fill is the former Topshop store in Liverpool. Although it is a building fronting onto Church Street it is part of the Liverpool ONE estate. Topshop closed in 2021 following the collapse of the once-mighty Arcadia Group.
Grosvenor partially filled the space on the ground floor with The Vintage Store in 2022. But it pulled out last year leaving the space vacant again. However, Iain is confident it will be filled again by the end of this year.
“We have some work going on in the Topshop unit,” he said. “That unit wasn’t a new build like much of Liverpool ONE. It is an old building and when a tenant leaves you get to have a proper look. And we saw that we have a lot of structural work to do in there.
“There is a tenant that is lined up for part of the space and there may be three or four other tenants in smaller units, because it is a big building. I don’t think we will have a problem filling those smaller units.
“It is a prominent space and it was underestimated how much work needed to be done. We were hopeful it would be available now but the necessary structural work will take another few months. I’d like to think it will be ready in the autumn.”
Grosvenor, with its data-driven approach, is increasingly driving footfall through pop-up collaborations with up and coming online-only retailers. And Iain says we are going to see more brands in Liverpool ONE that don’t actually sell anything in the shop.
He explained: “I think we are at the most fascinating point in retail history. If you try to fight the internet you will lose.
“I used to work in a bookstore and the business wanted to promote the website. But the staff wouldn’t display the web address because the sale would be lost to online. I thought that was bonkers.
“There has to be an omni-channel approach. You have to understand that sometimes store as showroom is the way forward. Because if that pound doesn’t go in the till here it needs to go in the online till. If it doesn’t go there it will go somewhere else.
“So you have your bricks and mortar retailers and everyone has a website but what we are seeing now is either the second or third wave of online retail. It is very social media driven.
“Brands don’t necessarily have a physical presence but we are inviting them in to have that presence. Their model is built online. And it may be they don’t want to sell out of these physical spaces but just showcase their products.
“One example here is ARNE, a menswear retailer that sells just online. They did a pop-up at Liverpool ONE for one weekend and they did sell stuff. And when it opened the queue went from Peter’s Lane back to John Lewis.
“All they did was post on Instagram that they were going to have a pop-up on this day at Liverpool ONE. And the whole thing just flies.
“We also worked with Luxe Collective. They had a pop-up that sold nothing. It was all about brand awareness. They spoke about how having a physical presence can be important so that people can see, look, feel and learn.
“On Cloud Trainers took a unit last year. Again, they didn’t sell any product. But people could come in browse, find out which trainer they wanted and they would divert you to either JD Sports or online.
“We are embracing this stuff because it will bring people to us. They will see something different – something they may have only seen in the online world.
“It is a hybrid model and some of the biggest brands on the high street need to catch on to this. That is how they can engage the younger customer. Brands such as Apple have already been doing this really well for a long time.”
That said, Iain added that long to medium leases with more established retail names are still critical to the Liverpool ONE business model as they offer a more secure income stream.
“What we do is we will have some spaces for the short lease options. That’s bold because there is going to be down time and there are costs associated with that. Because we know the impact is bigger than it is worth doing,” he said.
“Big chains are happy with medium to long-term leases. It is the smaller brands that don’t want to shackle themselves to long-term leases.”
But he adds that commercial landlords will have to start thinking differently if they want to continue to bring in footfall and be more data savvy when it comes to measuring sales.
There are ways of tracking whether a browse at Liverpool ONE has led to a sale of a product online later.
“We are data-driven here and we work with companies that can tell us, via mobile phone data, who is shopping here, where they have come from and where they went and demographic insights,” said Iain.
“If a pop-up unit here leads to a sale over there, tracking that is difficult but it is doable. If you have the John Lewis app on your phone and look at a washing machine, and you go home and buy it online, they know you have been in the store.
“We use loads of data but it is only ever used for making sure we have the right things for customers.
“We were the first retail centre in the country to have a data analyst 13 years ago. We still have the same guy. Back then it was quite primitive but now it is much more sophisticated.”
Because the experiential aspect has become so important for consumers Liverpool ONE has put much more of a focus on food and drink in recent years. When it opened in 2008 there were 13 F&B outlets. Now there are 48.
Iain does see the potential for more growth in that area but acknowledges the current economic environment for hospitality is a tough one with more of a focus on survival than expansion.
He is optimistic for Liverpool ONE this year despite having the tough comparative of Eurovision in spring 2023. Iain was not previously a big Eurovision fan and was sceptical when colleagues told him how big it was going to be. He soon changed his mind.
“I looked at some numbers from previous host cities and I realised what was coming,” he added. “And what a week that was.
“The only time I have seen it as busy as that is on Liverpool FC trophy parade days. It was unbelievable. The spirit was like nothing I have ever seen.
“So many people didn’t have tickets for the show itself, they just wanted to be in the city. We had a Eurovision pop-up store and people were queuing for two hours to get in. For me, every day was a school day.
“That concept of ‘free fun’ is something we have to keep working on. We had a Eurovision stage in Chavasse Park during Eurovision and it was free. We have to ask what else can we deliver?
“If you go in the city centre then it is still a bit of an event, unless you work in the city centre already. That opportunity to go and see and do is a big pull for a lot of people.
“What I like retail to be is make it an experience, do something that makes it when you walk in it feels like the old department stores. You have something going on, don’t just sell stuff.
“Our society advanced 10 years during the two years of the pandemic. So many things just accelerated. I now fully understand the phrase ‘the new normal’. Customers shop differently and online retail brands evolve so rapidly.
“What we are trying to do here is be more agile and to bring in more of those fast-changing brands.”
READ MORE: ‘We took a big hit on Liverpool ONE’ admits Grosvenor chief
While Liverpool ONE continues to be successful in attracting tenants it is also inevitable that some will leave. In January LBN revealed Sports Direct would open a major outlet in the former Compton House home of M&S in Church Street.
That leaves a question mark over the future of Sports Direct’s current two-storey outlet in South John Street in Liverpool ONE.
Iain is in no doubt should they leave, Grosvenor will have no problem finding prospective tenants for the site. But he also sees the Church Street investment as being good for the city overall.
He said: “This is my overall message. I’m not just saying to people ‘come to Liverpool ONE’, I am saying ‘come to Liverpool’. Liverpool ONE has never been an island. This is about what is good for the whole city.
“As long as Sports Direct stays in Liverpool, then I am happy with that.”