Managing Store Closures. What You Need To Know.

Managing store closures. What you need to know

Home » Managing Store Closures. What You Need To Know.

As retailers continue to navigate the challenges of transformation within the industry it’s inevitable that for some, the decision to close bricks and mortar stores will need to be explored.

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Ever-increasing overheads, reduced footfall and a channel shift online are all continuing to add to declining sales. When it comes to physical shopping in a bricks and mortar store, consumers are demanding a more immersive and experiential experience. There’s a growing trend to ‘supporting local’, with shoppers looking to understand the provenance and ethical traits of the goods they purchase and to be reassured they are putting cash in the pockets of those who run businesses in their local community.

Buyer behaviour is redefining the retail experience and for those agile enough to be able to respond, there are significant opportunities to grow and expand.  For some, keeping the doors open will become unfeasible with difficult choices to make.

Understanding the productivity of a store portfolio is best practice to help inform strategic site decisions.  Whether it’s as part of a growth strategy to focus on profitability or a cost-cutting necessity to reduce spend, decommissioning and closing retails stores is becoming part of new normal and a necessary element of the industry’s transformation.

Relationships matter

It’s important to understand the breadth of options available to manage a store portfolio, but when the decision has been made to undertake closures, relationships play a key part in ensure a smooth and cost-effective process.

The landlord is a primary stakeholder and should be managed as such.  Where possible, honest and transparent conversations from both parties about expectations, timelines and planned works will help ensure a more straightforward handover.

A detailed liability assessment is key to understanding what the liabilities are in line with any lease or contract that has been signed, which will inform the nature of works needed as part of the store closure process.

Confidentiality rules

If a site earmarked for closure is still fully functioning, it’s important to ensure that confidentiality of plans is protected until such time as broader communications are planned.  Working with a single supplier, or a small number of specialist professional services, who can provide early planning and surveying services without arousing suspicion is key to ensuring service continuity and financial stability.

Failing to plan is planning to fail

Before an expert asset removal specialist or strip-out technician can go anywhere near a site as part of the closure process, there is a raft of planning and surveying work to be completed.  From understanding the specification of how a space needs to be transformed through to discussions about asset management and any future benefit that could be retained, the planning phase is as detailed as it is significant.

Making the most of your assets

Just because a store is closing, it doesn’t mean there is no value in the ‘goods not for resale’ (GNFR) such as shelving, racking and display-ware.  Paying attention to an asset register and ensuring that items with an associated value are properly disposed of is a key way of minimising liabilities.

Dilapidation discussions

Managing the dilapidations process can be complex as a landlord or building owner asserts the covenants set out in the terms of the contract.  A lack of clarity about the best way to achieve the desired outcomes can lead to hefty bills as costs skyrocket on the back of misunderstood expectations. Working with an expert in this field can be a helpful way to manage dilapidations costs, utilising external expertise to position alternative, and more cost-effective approaches to achieve the ultimate requirements.

Managing waste

Stripping out a store and returning it to the original shell is a messy business, with the prospect of heavy M&E equipment removal and equipment disposal as well as general and recyclable waste.  Having arrangements in place to manage waste disposal is both a health and safety requirement but will also ensure focus remains on the work that still needs to be completed rather than thinking about how much there is to move.

Whether closing down a single store closure or multiple stores across a number of locations, there’s a degree of process driven activity that should ensure a relatively smooth transition.  Using the expertise of professionals who understand the nuances of working within the retail industry and how space can and should be transformed as part of your project team is going to deliver the best outcome in the most cost-effective way, allowing brand owners to focus on the next steps.


At Sigma, we are knowledgeable and experienced experts in store closures providing a smooth, professional and cost-effective support on store estate re-balances
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