Property Interview: Property specialist from Gordons on the rise of the discount retailer

“IT’S been quite a journey,” said Joanne Fearnley, partner and retail real estate expert at law firm Gordons, having acted for discount retailer B&M for the past 12 years.

Ms Fearnley, who was described as a “crucial part of our success story” by B&M chief executive Simon Arora, helped oversee the growth of B&M from a handful of sites to 500 across the UK.

B&M’s growth has followed that of other retailers, with Aldi, Poundland and Lidl, as well as Yorkshire’s own Poundworld increasing their market share year on year, and with growing customer numbers comes the need for more and more retail space.

Although discount retailers have become prolific post recession, Ms Fearnley said that it has been a gradual change, and relative newcomers such as B&M have benefitted from the inability of other high street retailers to keep up with the times.

B&M for example acquired 23 former Woolworths sites, as well as bigger sites from B&Q as demand for more warehouse-type space grew in the sector.

“In previous decades landlords have been able to impose terms more readily,” she said. “During the recession, the relationship between landlord and tenant became more a partnership out of necessity. It will be interesting to see if, as the economy recovers, it will change this relationship again.”

It will be difficult to deny the discounters, who are more flexible in terms and with space compared to more traditional retailers.

“Value retailers to not restrict themselves to the high street,” said Mr Fearnley. “If you look at how they’ve changed over the last 20 years with the demise of Woolworths, Habitat, and now BHS, retail requires constant reinvention of what people want really.

“People are shopping around which is why discounters have been so successful,” said Ms Fearnley, “and there is a backlash against supermarkets as well as a lack of snobbishness about going to variety retail, where shops may not be as polished as others.

It is people’s changing habits that are informing the spaces that retailers inhabit, and Ms Fearnley continued: “What we’re seeing now is very interesting, with the rise of the internet, people are more inclined to buy online. It hasn’t killed shopping but it’s become more of a rounded leisure activity.

“It’s not just about shops now, it’s about gyms, cinemas and restaurants. It’s about having a whole mixture. People are looking at spending a full day there so retail offerings are becoming much more blended.”

The growing diversity of shopping locations has also helped other big players in the wider budget market such as Pure Gym, which Ms Fearnley also acts for. Gyms and other lifestyle brands are becoming more frequent on retail parks, something which would have been unheard of a few years ago, said Ms Fearnley.

“There are always retailers that will want to be on the high street, but there are more options now that doesn’t require taking expensive city centre space.

“Where there is variety and diversity an area will thrive.”