UK department stores are disappearing - so what happens to retail spaces?

You’ve probably lost track of the number of articles written about the problems facing retailers.

The shape of the whole industry has been irrevocably changed with shoppers choosing to enjoy the convenience of shopping online instead.

In many cases, they are also rubbing salt into the wounds by doing their research in-store and then going away to find the same items at e-commerce sites where they are available for less money, thanks to their much lower overheads.

This has been one of the reasons for the disappearance of many famous names in recent years, including British department stores like BHS, Debenhams, and House of Fraser.

Once very prominent fixtures across the country, now they have left behind many thousands of square feet of prime retail real estate, with a distinctly uncertain future.

Why won't businesses buy department stores?

The principal problem is that these are large, single-use buildings that have been designed to accommodate up to 60 or more different departments under one roof.

To convert them for other uses is an expensive and complex proposition that few may be prepared to take on. This is especially true thanks to the uncertain future of the physical retail sector in particular.

Even chains of stores that are continuing to exist, if not thrive, are affected.

A good example is John Lewis, a relatively upmarket department store group renowned for its quality and service. Once there were 50 of these stores in the country, but 16 have closed down in the last few years.

How have retail sector stocks been affected?

The uncertainty of the whole retail sector has had another consequence in the form of falling share prices.

The knock-on effect of this has been to drive investors and speculators, for example in the increasingly popular field of CFD trading, to head for different sectors like technology, healthcare and property.

After all, as CFD trading is a strategy that relies on predicting the movements of individual companies' share prices, looking to ones that are showing promise is of greater appeal to investors.

One John Lewis store closure that has been particularly controversial is in Sheffield, the city in South Yorkshire once famous for its steelworks.

The huge building which housed John Lewis is a city centre landmark but now stands empty since closing for good in late 2021.

What will happen to unused retail spaces?

The future of the building, now owned by Sheffield City Council, could prove to be a blueprint for other similar retail spaces.

Among the plans being considered is a centre for the celebration of soccer, especially relevant as the city is where the rules of the game were first drawn up.

Another idea is to follow the example of a Parisian department store called Le Samaritaine which has been brought back to life as a combination of small retail outlets, offices, a pre-school nursery, and nearly 100 affordable housing units.

The plans are currently under consideration by the council and various other stakeholders.

While no decision is due for some time, other landlords with similarly large and empty retail spaces to fill will certainly be looking on with interest.