Abercrombie & Fitch’s plans to open a new London childrenswear store on Savile Row has led to demonstrations.
May 9, 2012
The recent news of Abercrombie & Fitch’s plans to open a new London childrenswear store on Savile Row has resulted in demonstrations and online petitions from a united front of unhappy tailors. Representatives of most of the major bespoke tailors based, some for hundreds of years, on ‘the Row’, have expressed their outrage that a global casualwear brand with a such a contrasting target consumer has been allowed into the historic street, world famous for its discreet high end British tailoring. Placards saying “Give Three Piece a Chance” and numerous disparaging statements made about the style, morality and branding of Abercrombie & Fitch have made no secret of the Row’s collective feelings about the suitability of the newcomer and the impact it feels the brand it will have on their businesses.
In contrast to several of the surrounding streets, Savile Row is not owned by a single landlord with a clear management policy for the character of the area. The attraction to individual landlords of secure and inflated rental income from successful mass-market retailers and or brands could, eventually, price the tailors out of the area should this new trend continue. Lush and The Kooples have also been rumoured to be moving in – arguably safe bets for landlords but potentially disastrous for the tailors.
But how much control does a landlord really have over who it rents to? In the case of the grant of a new lease, the landlord essentially has complete control over its own property and the identity of its tenants will come down to the landlord’s commercial and business decisions. Realistically, a landlord will often therefore favour the tenant with the most secure and reliable financial position which the landlord can confidently count on for regular and sizable quarterly rent payments, particularly in such a prime central London location. It is not difficult to see why a landlord may favour a company such as Abercrombie & Fitch over a smaller tailoring business with a niche market and potentially smaller profit margins, particularly at a time when consumers are tightening their belts and even more so where a property may otherwise be standing empty.
In the case of the assignment of a lease by an existing tenant, the terms of a well drafted lease are likely to give a landlord some degree of control as to who a tenant may assign to although the lease will generally provide that consent must not be unreasonably withheld.
In the case of a larger landlord with many units, for example in a shopping centre, it can also be considered reasonable for a landlord to be able to refuse consent if the proposed assignee does not fit with the mix of tenants that the landlord has planned for that development. This obviously does not apply in the situation currently faced at Savile Row because it concerned the grant of a new lease, but if it did it could have been the saving grace for the tailors. The more control a landlord retains however, the greater the potential for a limitation on the increase in rent at a rent review date. Conversely, the more freedom the tenant has in the assignment of its lease the greater the prospects of a higher rent at review. It’s very much a balancing act.
The local planning authorities may also have a part to play in approving the proposed use and any works required at property, if changes must be made, and so this is a point at which a commercial agreement could possibly fall through if is it deemed to be unsuitable by the planners. Alongside the perceived negative impact that Abercrombie & Fitch will have on the general atmosphere of Savile Row, there is criticism on the lack of consultation by the planning department at Westminster Council in relation to the change of use of the premises in question from office to retail and the seeming disregard by the landlord for the ‘special and unique’ occupancy of the rest of the street. In the future we may see increased lobbying of planners by local trade associations.
Interestingly, rumour has it that Savile Row was once occupied almost exclusively by doctors until the tailors took up residence, leading to the cluster of doctors we now find around Harley Street. How Savile Row develops in the future remains to be seen but it seems for now at least that the days of it being reserved exclusively for British tailoring may be over.