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Expert warns ‘zombie’ stores will plague high street for months

by David Jinks MILT
4th Feb 21 2:13 pm

The e-commerce delivery expert ParcelHero is warning that ‘zombie’ stores will haunt UK High Streets this year. It fears that shops such as Debenhams, Burtons and Dorothy Perkins could be revived as soulless versions of their former selves following lockdown.

Over the last few weeks, many of Britain’s former favourite retailers have been snapped up by e-commerce giants Boohoo and ASOS, who have only bought the brand and online businesses. Those physical shops whose stock was not bought as part of the takeovers will be left to wind down, effectively feeding off other High Street shops by undercutting them to clear stocks before their final closures.

ParcelHero’s Head of Consumer Research, David Jinks MILT, warns that over 560 stores will eventually close as their brands move online only. This is due to ASOS’ purchase of Topshop, Topman, Miss Selfridge and HIIT plus Boohoo’s buyout of Debenhams and potential takeover of Burtons, Dorothy Perkins and Wallis.

‘It’s a horror story for Britain’s High Street. The twist at the end of the tale is that some of these stores will come back to life after lockdown ends but their souls will have gone as their futures move online. Instead, these ‘zombie’ stores are likely to undercut local retailers because of the need to clear remaining stocks. This can only further injure other businesses on the High Street.

‘The administrator of Debenhams, FRP Advisory, has already announced: ‘Once Debenhams stores are able to reopen stock liquidation can continue in stores, the website will be operated by boohoo. The closing down sale will continue in stores for several weeks until the stock liquidation is completed and the value of this stock will be retained for creditors. Regrettably, all the UK stores will then be permanently closed.’

‘It’s not only Debenhams’ physical stores that are likely to be reanimated for a while. Burtons, Dorothy Perkins and Wallis shops may also reopen as ‘zombie’ stores after lockdown, especially if they are also purchased by Boohoo. The online giant did not purchase Debenhams’ remaining stock as part of its takeover deal, nor did it buy the assets of previous brands it has snapped up such as Coast and Karen Millen. These stores were forced to remain open while the remaining stock was sold.

‘In contrast, ASOS paid an extra £65 million for current and pre-ordered stock at Topshop and its other newly acquired brands, and it now seems unlikely these stores will ever reopen, even for a closing down sale.

‘Those “undead” town centre stores that do reopen, such as Debenhams, will be staffed by many of the 25,000 workers who know their jobs are going once this wave of closures ends. They are unlikely to be fully focused on customer service. It’s a retail nightmare.

‘‘Even when this wave of closures is over, don’t be lulled into a false sense of security. Other big, High Street names are also being snapped up by online-only retailers. For example, Evans is also leaving a plus-sized hole in the High Street after being bought by Australian e-commerce experts City Chic. The new owner says it will continue the business only online and that the remaining stores will be closed “in due course”.

‘ParcelHero has been warning about the dangers of a shift to ‘pureplay’ online-only stores for some time. We believe a balanced ‘brick-and-click’ approach will be best for retailers and shoppers alike. ParcelHero’s influential report ‘2030: Death of the High Street’ has been discussed in Parliament. It reveals that, unless retailers develop an omnichannel approach that embraces both online and physical store sales, the High Street as we know it will reach a dead-end by 2030.

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