9th November 2011
The sale of electricals retailer Comet for just two quid looks top value – there's not much you could buy in the store for £2 so why not have the lot? The buyers will get £50m on top to take it away – and seller Kesa will keep £49m in pensions liabilities
But there's even cheaper than the £2 shop. The inexorable advance of the pound shop – and its downmarket rival the 99p shop – is everywhere. And some stores have also become "pound shops" – they've renegotiated annual rents down to £1, hardly enough to buy a jar of peppercorns.
Landlords prefer to have tenants than empty properties. It saves on security, empty shops cast a gloom over those remaining, and retailers continue to pay business rates – landlords pay otherwise. Business rates are geared to rental values but on a five year cycle, increased each year by inflation, which does not count reductions within the period.
It's hardly news that retailing is about to hit its toughest Christmas (the few weeks when most make their real profits) in living memory. The Financial Times reports that Dixons, owner of Currys and PC World has come to a £1 a year deal on stores it might otherwise have shut while Card Factory, a low cost store, has similar arrangements for some outlets.