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Market Commentary

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Weekly Retail & Leisure News - 02​​​​​​​​​​​​​​​​ May, 2016​​​​​​​​​​​​​​​​​​

Austin Reed and BHS go into administration

Menswear retailer Austin Reed has entered administration, putting almost 1,200 jobs at risk. The retailer began in 1900 as a tailoring business in the City of London. A statement from the administrators blamed a "challenging" retail market and cash flow difficulties. The company, which has 100 standalone stores and is stocked in a further 50 stores, has struggled to compete in an increasingly competitive market, after a lack of investment in its stores, and has seen sales fall as result.

The menswear brand was the second UK retailer to enter administration in as many days, following the failure of BHS. It was just over a year since the 88-year-old retailer had been sold by Sir Philip Green to a consortium of unknown investors for £1. Damian Sumner, head of Retail Agency at JLL, commented: “this will be good news for discounters such as Home & Bargains, B&M, Poundworld as well as the discount grocery chains. Clothes retailers such as Primark, H&M and Next have also been eyeing up some stores. They will now be able to agree deals with landlords at affordable levels of rent and some will be seeking to negotiate freehold deals.”

In other news, Home Retail Group has blamed consumer uncertainty for its final sales performance as a standalone group, commenting that the retail industry is being challenged. In the year to February 27, LFLs at Argos, whose stores are being sold to Sainsbury's, fell 2.6%. LFLs at Homebase fell 5.2% in the same period; Australian group Wesfarmers is buying the DIY chain. Overall Home Retail Group’s profit before tax dropped 28% to £94.7m from £132.1m.

Read JLL’s view on the impact of BHS’s administration on its store portfolio

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