Nick Bailey: Oxford Street’s future is uncertain as its famous department stores decline

Nick Bailey: Oxford Street’s future is uncertain as its famous department stores decline

One of the consequences of the Covid-19 pandemic and the shift to online shopping has been the complete restructuring of Oxford Street’s department stores, throwing the future of the whole of London’s most famous retail avenue into the balance. A combination of factors, including a rapid decline in foreign visitors, working from home and an aversion to using public transport, has forced at least five major stores to downsize or seek alternative uses. Many owners also argue that business rates unfairly penalise them, placing online retailers at an advantage.

The first shock came when it was announced in July 2020 that the Weston family was putting Selfridges up for auction at a cool £4 billion. It is not yet known whether any sale has been agreed or what alternative uses for the building are being considered. But following this, other famous stores advanced proposals for downgrade their retailing content and converting upper floors for other uses, such as offices. John Lewis was one of the first to say it would be retaining only four floors for retail use and letting the upper three for office use. The John Lewis Partnership has already closed at least 16 outlets across the UK in the past two years.

At the Marble Arch end of Oxford Street, Marks & Spencer’s application to redevelop three buildings there is soon to be considered by Westminster City Council. They are applying to reduce the retail content by a third, to 13,000 square metres, and to build 45,000 square metres of offices with an additional café or restaurant and gym.

Debenhams closed its Oxford Street store in May this year and has commissioned architects AHMM to refurbish the building while adding three additional floors of “flexible office space” on its upper levels. The ground floor retail element will be augmented with a restaurant and possibly a gym.

Last but not least, Mike Ashley’s House of Fraser announced on 17 November that its flagship store will close in January. The building is currently owned by a German family and has recently won permission for a redevelopment scheme to create six floors of offices with retail on the ground floor, a pool and gym in the basement and a rooftop restaurant.

In their heyday, the combination of all these department stores trading on one street in Central London made Oxford Street the premier retailing location in London and the UK. This will be no more, and shoppers will increasingly go to indoor and off-centre locations, such as Brent Cross and the Westfield malls in White City and Stratford.

Questions remain about whether there is sufficient demand for Oxford Street’s additional office space and what exactly the locational advantage will be if there is also a reduction in retail space. However, Crossrail, when finally opened next year, will greatly increase the accessibility of the street to Heathrow and the City. Had it opened late in 2018, as originally planned, it might have moderated the rapid retail decline. One positive development going completely against the trend is that IKEA is moving into Topshop’s flagship store at Oxford Circus in autumn 2023.

Westminster’s recently adopted City Plan seeks to maintain Oxford Street at the heart of its West End International Retail Centre. Its policy on this specifically excludes any residential uses along the Oxford Street frontage, making offices possibly the only viable alternative.

The Council has also been exploring ways of reinvigorating the street by enhancing the public realm, including building the infamous Mound. It initially proposed creating two pedestrian piazzas either side of Oxford Circus, together with other alterations to traffic flows and bus routes. These proposed changes were put out for consultation in June, but have been put on hold until after the May 2022 local elections. Local residents’ groups in the hinterland, whose narrower streets have considerable residential populations, strongly opposed the plans on the grounds that they would displace traffic.

Oxford Street is destined to undergo drastic change in the coming months, but precisely what the future holds remains very uncertain.

Nick Bailey is Emeritus Professor of Urban Regeneration at the University of Westminster. Follow Nick on Twitter

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Categories: Analysis

2 Comments

  1. Philip Virgo says:

    It looks as though the Westminster plan may have been overtaken by reality. Given the probable permanent decline demand for offices, serviced accommodation, including for office and retail workers, might make more economic sense – unless the Elizabeth line makes hotel conversions to help bring the overseas shoppers back more attractive.

  2. JRichards says:

    It is high time Westminster looked at updating their Oxford Street policy – it is lagging well behind reality. It is absurd to ban conversion to residential property. What is desperately needed in this part of London is genuinely affordable housing and social rent housing, in substantial quantities. WCC should be less resistant to change, and get on with starting to sort out the housing crisis in the West End.

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