This article is from the Australian Property Journal archive
BRITAIN’S largest department store, Debenhams, is retreating from the Australian market, leaving behind 3,600 sqm of empty space at St Collins Lane in Melbourne’s CBD.
Debenhams revealed the exit via an email to Australian shoppers, less than two years after opening its flagship store in St Collins Lane, and three months after Debenhams UK was put into administration with subsequent plans to close and sell 50 of its 241 stores to be repay lenders.
Retail sales in Britain fell at their fastest rate in May since 1995, by 2.7%.
St Collins Lane has more than 9,000 sqm over four floors plus a mezzanine level, and has around 60 stores. The exit of Debenhams leaves space over two floors. Its layout at St Collins Lane was a smaller concept developed for Australia.
The lease, which runs for at least 10 years, is held by Greenlit Brands. Debenhams was looking to open 10 stores in Australia as part of a 15-year franchise agreement with Greenlit Brands, which also owns discount department stores Harris Scarfe and Best & Less, as well as Freedom and Fantastic Furniture.
Michael Ford, Greenlit Brands chief executive officer, said the company had considered the implications of the Debenhams UK administration and decided to terminate its franchise agreement.
JP Morgan Asset Management acquired St Collins Lane late in 2016 for $247 million from LaSalle. The owner had spent $30 million overhauling what previously the dated Australia On Collins mall, looking to add a high-end retail hub in the heart of the city following the opening of the Emporium and debut of Swedish fast fashion giant.
The centre was nearly fully leased by the time of JPMAM’s acquisition, however by the middle of 2017 it was facing reported vacancies of around 45% and only three of its restaurant offerings were trading, despite its high profile location between Collins St, and Little Collins St, and positioning at the base of a 380-room Novotel hotel.
Earlier this year, leasing agents CBRE secured 12 new tenants for St Collins Lane. German camera maker Leica took up 222 sqm in the new audio-visual technology precinct on the first floor. Shujinko, Poke Work Shop, Sushi Boto and Meat the Challenge signed up for dining food hall space alongside Neil Perry’s Burger Project and Saint Dreux, and British luxury watch company, Bremont, and boutique retailer Claudie Pierlot also leased spaces on the ground floor with Tag Heuer, Birkenstock, Coach and Zadig & Voltaire.
Debenhams is the second major British retailer to fail in the Australian market after the local arm of Topshop collapsed in 2017. British parent company Arcadia bought back the label’s assets in Australia, but has teetered on the brink of collapse for some time and its Market Street site in Sydney is the last store trading down under. Stores at the Emporium and Westfield Bondi Junction close in May, while the company announced the close of all 11 Topshop stores in the US.
