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The Mystery Of The Coronavirus High Street: Why Some Shops Are Stripped Bare, And Others Are Not

These days most people don’t get to walk down high streets: We’re all under house arrest. That means few people have noticed the different ways retailers have responded to the forced shutdown.

Joules, the high street fashion brand with 123 outlets, has opted for stock clearance. White Stuff, who have 115 stores often just a few yards away from Joules on most high streets, has simply locked up like it would any night of the week.

What to do with your building while it is unoccupied is a challenge currently vexing owners and property managers across the UK, and retail is at the forefront. What are the liabilities of leaving a store unoccupied for weeks, possibly months on end, while it is full of stock?

No Advice From The Police

Joules, cleared of stock

Joules and White Stuff are staples of the British high street. They have roughly the same number of stores, appear on roughly the same selection of high streets and chose roughly similar premises. The White Stuff demographic might be slightly younger and funkier (and their prices are a shade higher) but from the point of view of property management they present almost identical challenges.

All of which makes their two very different approaches to the coronavirus crisis difficult to explain. Joules has cleared its shops of stock, whilst White Stuff has left things exactly as they were on 23 March, when the UK lockdown was introduced.

Joules told Bisnow it was common practise to secure stock before closing shops, and stock removed from stores could be re-integrated into its online operation. The retailer did not cite pressure from insurers or landlords, but did say that apparel left in shops might fade in the summer sun.

White Stuff did not respond to Bisnow's invitation to comment.

Property managers said there is plenty of scope for different responses as retailers interpret a rapidly changing situation in different ways.

Workman partner Nick Hilton drew attention to an undercurrent of concern about security.

“Security remains a high priority for all occupiers, trading or not, and we are reminding retailers to remain vigilant about their own security measures, while we ensure appropriate centre security response is in place, using remote CCTV monitoring to supplement on-site guards and mobile patrols,” Hilton said. 

Should stock be removed? The expert view is divided.

“Any cases of theft appear to be isolated at this stage, so as things stand, we are not explicitly advising tenants to remove stock or board premises, we’d just simply advise them to err on the side of caution, don’t give people a reason to get in and, check your insurance policies,” FHP Head of Birmingham Doug Tweedie said.

“We’re aware of some smaller independents that have taken the additional step of stripping their shelves of stock now, which is understandable — it’s down to individuals to decide what is best for them."

Of the larger retailers, premises are typically being treated as occupied if open at the point of lockdown and they have invoked standard procedures to keep the premises as secure as possible e.g. keeping power on for emergency lighting and alarms but turning off all other services. Fixtures, fittings and stock remain in place, Tweedie said.

Smaller retailers are looking at the security risks and removing stock whilst larger retailers, who do not expect lightning to strike all of their stores simultaneously, and thus feel less exposed, are more relaxed.

Bisnow approached the National Police Chiefs Council (the organisation formerly known as the Association of Chief Police Officers) and asked them if any guidance had been issued to retailers, and if so what it said?

“Nationally, no advice has been issued to retailers regarding leaving stock inside premises,” the NPCC told Bisnow. 

If it is not the police, are landlords putting tenants under pressure? If they are, it has escaped the notice of the British Property Federation. The organisation confirmed to Bisnow that it has issued no guidance on the subject.

Insurance Gets Complicated

White Stuff, closed but still fully stocked

If police or landlords are giving no guidance, then the guidance on offer from insurers is more plentiful but opaque.

“We’re aware that different brokers and insurers are applying different conditions on premises that are temporarily unoccupied,” Hilton said.

Some policies are opaque on liabilities in these circumstances, and insurers are busy clearing up the misunderstandings. Some are inserting clauses disclaiming any responsibility for loss resulting from infectious disease, the Financial Times reports.

Insurers are reported to have adjusted the cover offered to tenants in case they are denied access to their premises to exclude disease in policy renewals, many of them due on 1 April, the Financial Times added.

As yet these changes are unlikely to be widespread. Responding to questions from Bisnow about the current position, the Association of British Insurers painted a more generous picture. 

“Policies will often include conditions that are intended to ensure good practice in protecting buildings of damage caused by the risk of fire, theft and escape of water, which are often increased when a building is empty," a statement from ABI said. "It is important that business owners continue to follow risk management advice and ensure they understand what steps they need to take.

“Some insurers have also waived requirements for their business customers to immediately notify them of their unoccupied status, (depending on the individual business circumstances)."

The ABI has published guidance here.

The 60-Day Deadline

Joules interior, stripped bare

Major names like AXA UK also insist they are being as generous as possible.

“To help our customers and their tenants, AXA UK has extended the period a building can be left empty before it’s considered unoccupied to 60 days," AXA UK Reputational Risk Manager Rebecca D’Cunha told Bisnow. That means full cover remains in place for 60 days, during which AXA asks customers contact it or their broker to discuss what needs to be done at the end of the period. 

“We strongly advise that premises be made secure and any guidance on risk management is followed, but we will not classify the premises as empty until the 60 day period has expired.”

Since both buildings insurance and the tenant's insurance are implicated here, a careful reading of both will be necessary.

The lockdown still has some way to run. Optimists say it will end in June, pessimists say that until the government has found an alternative strategy to virus suppression, and they haven’t yet, one should assume lockdown in some form goes on for much of the year. Or maybe into next.

At some point close to the insurers' 60-day deadline many more retailers will have to decide what to do with their unopened shops and the stock left inside. One way or another, we can be sure events will soon force their hand.