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Author Topic: Sad news for Opti  (Read 1723 times)

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Eboy.com

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Re: Sad news for Opti
« Reply #60 on: 08 July 2019, 18:34:07 »

We don't desperately need lots more houses in this country. We desperately need less people.  ;)
Ain't that the truth.  We are hugely overpopulated, and the population needs thinning out a fair bit.  I'm thinking in the order of 2/3rds minimum.
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Lizzie Zoom

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Re: Sad news for Opti
« Reply #61 on: 08 July 2019, 18:40:47 »

Even if disposable income increases to the levels previously seen, it will be in the pockets of the younger generations.
But its not looking like increasing for the foreseeable future.  And that's why small retailers can't get business loans from the bank to see them over, and large retailers are really struggling to get anyone to invest.

Would you hand out a loan to a small retail shop selling the usual fare given the current market conditions and what any business plan could allow for over the next 5 years? :-\ :-\

Not even the big boys can now easily get them.

But there is always Brexit to give everything a boost...................................!! ::) ::) :-X
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Eboy.com

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Re: Sad news for Opti
« Reply #62 on: 08 July 2019, 19:00:50 »

Even if disposable income increases to the levels previously seen, it will be in the pockets of the younger generations.
But its not looking like increasing for the foreseeable future.  And that's why small retailers can't get business loans from the bank to see them over, and large retailers are really struggling to get anyone to invest.

Would you hand out a loan to a small retail shop selling the usual fare given the current market conditions and what any business plan could allow for over the next 5 years? :-\ :-\

Not even the big boys can now easily get them.

But there is always Brexit to give everything a boost...................................!! ::) ::) :-X
I think if you could show a viable plan, even if it was going to take more than 5yrs, you'd get a bank to back you if the plan was sound.

But this one looks set for a generation.  And one day, online might become viable for everyday (non grocery) shopping for everything. But I suspect only when walk-in shops are no more, and when they can charge proper postage (both ways) and a return fee (which needs a law change, but that will happen).


Bro was able to pre-empt all this - its been on the cards for well over a decade - by buying all the freeholds to his, which keeps greedy landlords at bay.
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Re: Sad news for Opti
« Reply #63 on: 08 July 2019, 20:01:02 »

I don't think shops will ever completely die out unless women do as well. They love to go to shops, look at things, feel the fabric etc. try things on, compare them with other things of different shapes and colours etc, then get incredibly happy when they walk out of the shop with a bag full of things. ::)
Tinternet cant replace that.
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Lizzie Zoom

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Re: Sad news for Opti
« Reply #64 on: 08 July 2019, 20:08:54 »

Even if disposable income increases to the levels previously seen, it will be in the pockets of the younger generations.
But its not looking like increasing for the foreseeable future.  And that's why small retailers can't get business loans from the bank to see them over, and large retailers are really struggling to get anyone to invest.

Would you hand out a loan to a small retail shop selling the usual fare given the current market conditions and what any business plan could allow for over the next 5 years? :-\ :-\

Not even the big boys can now easily get them.

But there is always Brexit to give everything a boost...................................!! ::) ::) :-X
I think if you could show a viable plan, even if it was going to take more than 5yrs, you'd get a bank to back you if the plan was sound.

But this one looks set for a generation.  And one day, online might become viable for everyday (non grocery) shopping for everything. But I suspect only when walk-in shops are no more, and when they can charge proper postage (both ways) and a return fee (which needs a law change, but that will happen).


Bro was able to pre-empt all this - its been on the cards for well over a decade - by buying all the freeholds to his, which keeps greedy landlords at bay.

But that means huge amounts of capital are tied up in bricks and mortar, not being invested in trading requirements. It also means any retail business that does also has to take the full costs of maintaining those buildings, which can be avoided if a sound lease is negotiated properly.

Many retail companies, including the one I was part of for 28 years had in excess of 1,000 units, and like most in our field decided to sell all free holds to recoup the capital and re-invest it in our core business, which like most in the major retail field, is not running a property empire.

 That extra boost of funds gave the means to acquire other retail companies, as well as constantly updating our street presence. It also meant that when a store became non-viable, at the end of the lease, we walked away without costs apart from stripping the unit. That means the company has flexibility to act quickly when necessary. In addition it also results in a freedom away from the property game whereby commercial property can depreciate with the local area and market forces. One reason why landlords are, albeit temporarily, agreeing to reduced rents, is that they know how their property will devalue with so many huge stores going onto the market together. There will also be tax implications on capital gains when, or if, you can sell. Even small units are going down in value as so many are empty, on the market together, often in now poor locations. That is why charity shops have been taking them on, but even then they cannot make them pay. Demolition of the surplus shops will release valuable land, but that redevelopment is costly and usually a game for the major developers, who may reap the rewards in due course.

However, owning or not your bricks and mortar does not change the business rates you pay, does not increase customer footfall, or assist your offer to customers. It does not tackle the underlying reasons for sales decline, which are now numerous and, for many, proving to be over whelming.

Online businesses have none of those difficulties that apply to bricks and mortar units. They can be totally flexible to meet trading conditions, and of course are not paying currently those high business rates. A different retail game altogether, which will grow and business plans are reflecting that, and with low start up costs to boot, it is far easier to get big fast.

The traditional retailer currently is now having to face business plans that have to predict lower footfall, higher costs, less complimentary traders around them, and higher product prices as their buying power declines, with suppliers more likely to work on attracting traders who are growing and with a brighter, financial, trading future. It is all going one way, and will in our lifetimes. ;)



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Lizzie Zoom

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Re: Sad news for Opti
« Reply #65 on: 08 July 2019, 20:15:48 »

I don't think shops will ever completely die out unless women do as well. They love to go to shops, look at things, feel the fabric etc. try things on, compare them with other things of different shapes and colours etc, then get incredibly happy when they walk out of the shop with a bag full of things. ::)
Tinternet cant replace that.

That is us older women. The new ladies are far more inclined to buy online as that is an enjoyment in itself, with prices to assist that process. They may go to the traditional shops to look, feel, try on, but then not buy, but going online for the cheaper offer from a wider range.  That is why most of the online people have done so well, but just like traditional retailers, if you get your offer wrong you will be hit with declining sales, loss of profit, which has resulted in casualties as with any business ;)
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Re: Sad news for Opti
« Reply #66 on: 08 July 2019, 22:57:33 »


Bro was able to pre-empt all this - its been on the cards for well over a decade - by buying all the freeholds to his, which keeps greedy landlords at bay.

This is pretty crucial, and it would certainly be on my list of must-haves if I were to run my own business (although I'm not smart/driven enough to make something like that work). To give 2 eal life examples. Firstly Where I work, there's in excess of 2,000 commercial units, the majority of which are freehold. Secondly, my parent's best friends own an estate agents in the south east with about 10 branches. Both businesses would not have survived 2008-10 had they not got freehold property. Indeed, the property arm of TP has made more money than some of the high street names in the group every year for about the last decade.  ::)
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Re: Sad news for Opti
« Reply #67 on: 09 July 2019, 01:39:14 »

Any borrowing, regardless of lending or investment, is liable to impose unnecessary pressure on any business of any size.

The only people who made money from the last crash either paid cash at 10 on the $ or bet against the market with clear funds.

Previous and future crashes will be no different...
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Lizzie Zoom

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Re: Sad news for Opti
« Reply #68 on: 09 July 2019, 09:23:35 »


Bro was able to pre-empt all this - its been on the cards for well over a decade - by buying all the freeholds to his, which keeps greedy landlords at bay.

This is pretty crucial, and it would certainly be on my list of must-haves if I were to run my own business (although I'm not smart/driven enough to make something like that work). To give 2 eal life examples. Firstly Where I work, there's in excess of 2,000 commercial units, the majority of which are freehold. Secondly, my parent's best friends own an estate agents in the south east with about 10 branches. Both businesses would not have survived 2008-10 had they not got freehold property. Indeed, the property arm of TP has made more money than some of the high street names in the group every year for about the last decade.  ::)

Of course there are freehold commercial properties, but what I was saying applies to major national retailers, where you will find the very large units they occupy are owned by investment and property companies.  That is why you have heard of the likes of Debenhams and the Philip Green asking their landlords to reduce the rents.   

Those retailers are the ones that are closing down, and as I stated they are going to leave large gaps in high streets and shopping centres. That brings the value of surrounding businesses down and ultimate lead to those commercial properties, regardless of who owns them, losing commercial value. That then will affect badly those independant, small traders, who do own their properties. That is what I was talking about.

As for buying your own business Jonnydog, no owning the bricks and mortar is not your first priority.  Unless you have the large funds required in place, your priority is acquiring the trading value of an existing business to allow a quick start up if their trade is the one you want, or ensuring you have arranged the funds to meet all the costs of a new start up.  Your money has to go into the trading element of that business; fitting out (a huge cost), arranging all utilities, stocking (although you will have up to 28 days of credit), staffing, advertising (if appropriate)  plus miscellaneous out goings.  The money you have or/and are have obtained from the banks must be aimed at the ability to trade, which unless you are a trader like an estate agent, your priority is that business not owning property. 

That is why the majority of new start ups have always been in leasehold property, as the practicalities dictate your usually limited funds cannot be tied up in bricks and mortar, no matter how attract that looks long term. You just have not got the funds to own the property and build your business with the cash flow you will require being readily available.  ;)
« Last Edit: 09 July 2019, 09:42:58 by Lizzie Zoom »
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Lizzie Zoom

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Re: Sad news for Opti
« Reply #69 on: 09 July 2019, 09:43:24 »


Bro was able to pre-empt all this - its been on the cards for well over a decade - by buying all the freeholds to his, which keeps greedy landlords at bay.

This is pretty crucial, and it would certainly be on my list of must-haves if I were to run my own business[/highlight] (although I'm not smart/driven enough to make something like that work). To give 2 eal life examples. Firstly Where I work, there's in excess of 2,000 commercial units, the majority of which are freehold. Secondly, my parent's best friends own an estate agents in the south east with about 10 branches. Both businesses would not have survived 2008-10 had they not got freehold property.[/highlight] Indeed, the property arm of TP has made more money than some of the high street names in the group every year for about the last decade.  ::)

Of course there are freehold commercial properties, but what I was saying applies to major national retailers, where you will find the very large units they occupy are owned by investment and property companies.  That is why you have heard of the likes of Debenhams and the Philip Green asking their landlords to reduce the rents.   

Those retailers are the ones that are closing down, and as I stated they are going to leave large gaps in high streets and shopping centres. That brings the value of surrounding businesses down and ultimate lead to those commercial properties, regardless of who owns them, losing commercial value. That then will affect badly those independant, small traders, who do own their properties. That is what I was talking about.

As for buying your own business Jimmy, no owning the bricks and mortar is not your first priority.  Unless you have the large funds required in place, your priority is acquiring the trading value of an existing business to allow a quick start up if their trade is the one you want, or ensuring you have arranged the funds to meet all the costs of a new start up.  Your money has to go into the trading element of that business; fitting out (a huge cost), arranging all utilities, stocking (although you will have up to 28 days of credit), staffing, advertising (if appropriate)  plus miscellaneous out goings.  The money you have or/and are have obtained from the banks must be aimed at the ability to trade, which unless you are a trader like an estate agent, your priority is that business not owning property. 

That is why the majority of new start ups have always been in leasehold property, as the practicalities dictate your usually limited funds cannot be tied up in bricks and mortar, no matter how attract that looks long term. You just have not got the funds to own the property and build your business with the cash flow you will require being readily available.  ;)

Error, wrong button again!! :-[ :-[
« Last Edit: 09 July 2019, 09:46:06 by Lizzie Zoom »
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Lizzie Zoom

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Re: Sad news for Opti
« Reply #70 on: 09 July 2019, 09:44:05 »


Bro was able to pre-empt all this - its been on the cards for well over a decade - by buying all the freeholds to his, which keeps greedy landlords at bay.

This is pretty crucial, and it would certainly be on my list of must-haves if I were to run my own business[/highlight] (although I'm not smart/driven enough to make something like that work). To give 2 eal life examples. Firstly Where I work, there's in excess of2,000 commercial units, the majority of which are freehold. Secondly, my parent's best friends own an estate agents in the south east with about 10 branches. Both businesses would not have survived 2008-10 had they not got freehold property.[/highlight] Indeed, the property arm of TP has made more money than some of the high street names in the group every year for about the last decade.  ::)

Error!!  Pushed wrong button!! :-[

I have been trying to edit my post with Jimmy, instead of Jonnydog!! ::) ::)
« Last Edit: 09 July 2019, 09:48:19 by Lizzie Zoom »
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Lizzie Zoom

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Re: Sad news for Opti
« Reply #71 on: 09 July 2019, 11:08:38 »

For those still interested, I have been doing some research to up-date my knowledge of my old profession.

I have found this from one of the must read weekly publications, The Grocer, that makes very interesting reading, and indeed reflects the march away from the high street to out of town super units, led very much by the grocery boys:

https://www.thegrocer.co.uk/power-list/power-list-2018-who-is-pulling-the-property-strings/562893.article

Investment in these properties is still very good, as this sector has been affected less by the march to online retailing, now as I stated before that has climbed to an average 21% of ALL retailing, and still going up steadily.

Food Stores will fly the flag for some time, but the infighting / severe competition between them, such as the growing influence of Aldi and Lidl, which I have learnt the latter is a major property holder, will have it's effect.  I note that Tesco's have reduced their property portfolio to 49%, down over two years by 2%.

Now, the question is, what will Brexit do to affect, or not, the investment in retail property from abroad.  Hong Kong companies alone now own 21% of the Oxford Street properties, a marker of trend.

The Investors Chronicle states, quote:

Retail: surviving the rout -
The growth of online shopping that has lifted logistics assets has conversely meant a torrid time for physical retailers and their landlords 2018 saw retail failures accounting for well over 1,000 stores. The unsurprising consequence was that in the last three months of 2018 all retail rents were down by around 1.5 per cent, while over the same period shopping centre values shrank by 3.7 per cent. Over the year, this has been the weakest sector of the real estate market, with total negative returns of 8.3 per cent, largely because of lower capital values.


Adding:
Ostensibly, the industry discounts on offer point to pockets of value. Taking all the property sectors together, total returns in 2019 are likely to contract to 3.2 per cent, according to research by Peel Hunt, well below the five-year average of 11.9 per cent a year. But extremes within that forecast show industrial assets delivering a 3.7 per cent return for 2019 and 2020, while at the other end, rents and capital values in the retail sector are expected to show a peak to trough fall in rents and capital values of 22 per cent.

So a moving feast, and in short I am glad to have retired. There are a lot of very worried people in retail, even in the Food Store sector, as to reduce costs - a never ending task!! - more "Smart Shopping" type initiatives will be brought in causing yet more job losses.

No at happy picture! :'( :'(




« Last Edit: 09 July 2019, 11:12:43 by Lizzie Zoom »
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STEMO

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Re: Sad news for Opti
« Reply #72 on: 09 July 2019, 11:10:26 »

Riveting, Lizzie  ;D
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Lizzie Zoom

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Re: Sad news for Opti
« Reply #73 on: 09 July 2019, 11:14:11 »

Riveting, Lizzie  ;D

I know, to most - BORING!!!! ::) ::) ::) ;D ;D ;D ;D ;)

But to me, what was bread and butter, and must know knowledge! :D :D :)
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Re: Sad news for Opti
« Reply #74 on: 09 July 2019, 11:53:10 »

But that means huge amounts of capital are tied up in bricks and mortar, not being invested in trading requirements. It also means any retail business that does also has to take the full costs of maintaining those buildings, which can be avoided if a sound lease is negotiated properly.
Nah, when he rented the shops, he was still responsible for all upkeeps and repairs.  Plus if he made improvements, his rent would go up dramatically, as the shop was now more desirable.

That's how it works in the real world.

Sounds like you're more familiar with big, square units, which can't really be improved, or need huge amounts doing (structurally) ;)
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