Intu, the owner of some of the largest shopping centres in the UK, including the Trafford Centre in Manchester and the Lakeside complex in Essex, has entered administration.
Intu failed to reach an agreement with its lenders during financial restructuring talks. The company owns 17 centres across the UK, which will all stay open under the administrators KPMG, the BBC reports.
The significant impact of COVID-19 on retail
The company’s shopping centres are separate companies, and so have not gone into administration. Buyers are now being sought for these centres, however this might prove difficult.
The company had around £4.6 bn worth of debt before the coronavirus outbreak, which saw all non-essential shops in the UK close in March. Shops are gradually reopening in the UK, however, coronavirus has hit retail hard.
According to Property Week, landlords only collected 18% of commercial rents for the three months up to June 24.
In May, Intu said that it was facing “significant market uncertainty” because of COVID-19.
‘Fashion House’ store for digital brands
In March, Intu announced the first UK store to be solely dedicated to digital brands. ‘Fashion House’ is set to open in June at Intu Lakeside, and will feature new retail technology such as a selfie-mirror that will encourage people to share pictures on social media.
Nine digital brands will move from online-only to having a presence in a physical shop. Flexible leases will allow emerging digital brands to feature in the shop when space becomes available.
Rebecca Ryman, customer performance director at Intu said in March that Fashion House will create “an amazing experience for visitors, bringing a little bit of magic into physical retail. This will include impromptu DJ sets; fashion shows and new technology that will let our visitors tap into their social networks as part of their retail experience.”
Intu had planned to manage and operate the store, and it is not yet clear what will happen now the company is in administration. However, this type of retailtainment store, offering a mixture of retail, technology and entertainment, is likely to become more popular as retail looks for ways to encourage shoppers to return.
In February, a Nickelodeon Adventure opened at Intu’s Lakeside centre in Essex. This family-friendly indoor adventure experience is the first of its kind in the UK, with over 50,000 square feet of various themed zones.