Corney & Barrow and Handford Wine have closed London shops because of exorbitant rents.
Both high-profile merchants – established in their areas for some 20 years – said rent increases of up to 40% are to blame.
This has become a common refrain across the retail sector, but wine has been hit particularly hard because of its low margins.
‘Whoever takes over our space will have to sell something that is either of considerably greater value than a bottle of wine, or sold in huge volume,’ Oliver Hartley, Corney & Barrow’s sales director, told decanter.com.
‘Even in an area like Notting Hill, you have to sell a lot of bottles of basic Macon to cover the kinds of increases we were facing – on top of business rates, staffing and other costs. Not everyone comes into the store to buy Petrus.’
The closure of the Corney & Barrow branch spells an end to the company’s London retail operations, though its Newmarket shop remains open because it doubles as a regional office for other business channels. Handford’s South Kensington shop also remains open.
‘This is an enormously difficult situation,’ said Paul Browne, head of property for the British Retail Consortium (BRC), a trade association representing retailers of all sizes.
‘In certain locations we’ve seen huge spikes of 70, 80 even 100%, as this is what some retailers are willing to pay,’ he said. ‘Clearly this is very difficult for many small and medium enterprises to absorb, and many are just go out of business. This has huge economic and social implications for neighbourhoods.’
Browne said the issue of rent – second only to wages in terms of cost to businesses – has been high on the BRC’s agenda for the last two years.
‘As rent is a product of the market, it’s nearly impossible for us to make a case to landlords to lower it,’ he said.
‘Instead, the BRC is actively lobbying for an end to the standard “upward-only” rent increases which hit businesses hard every few years. We’d like to see an annual review, perhaps linked to the retail price index rather than compounded hikes.’
The news is not all bad, however, as other, newer independents including Bedales and Green and Blue have found a way to expand beyond their flagship stores – albeit into less central areas.
Bedales’ first shop, in London’s iconic Borough Market, has an unusual lease.
‘Our landlords are the Market’s trustees, so a non-profit-making organisation,’ said Bedales director Amy Harrison. ‘And our lease has a certain timescale with no rent review. But in Spitalfields (the chain’s second shop) it’s a different kettle of fish. So far so good, but we’ll have to see how it goes.’
Written by Maggie Rosen in London