13 September 2017 – El País
(…). Demand from major operators, such as Zara, Uniqlo, H&M and even Seat, for flagship stores in city centres is boosting investment in these types of high-street establishments. According to a study by the real estate consultancy JLL, such investment amounted to €402 million across Spain during the first quarter of 2017
Examples of flagship stores (…) are found in the centre of Spain’s major cities. One of the most paradigmatic is Primark’s store, which occupies more than 7,000 m2 on La Gran Vía in Madrid (..). Flagship stores are essentially an image, a tourist attraction, where the entire collection of a company is presented and where consumers can also do online shopping and collect orders. It is also very typical for brands to make presentations and hold events at their stores.
In Barcelona, the H&M, Zara and Massimo Dutti stores on Paseo de Gracia, and the large store in the Born neighbourhood where the sunglasses brand Etnia took up residence this year, are examples of the presence of flagship stores in the Catalan capital. On 20 September, Uniqlo, the Japanese competitor of Inditex, will open a large store, also on Paseo de Gracia. But the interest in these types of establishments is not limited to the world of fashion. Companies such as Seat, Ikea and Leroy Merlin, and even large banking institutions, have all expressed their interest in raising their profiles on the main commercial thoroughfares.
“It is the way the brands have of positioning themselves in the market”, explains Daniel Jiménez, Director of Retail at the real estate consultancy Aguirre Newman. Jiménez says that there is a great deal of demand for these types of premises, and that the brands do not settle for any old shop: they want open-plan spaces, in good locations with attractive architectural features.
The effect on local trade
The main streets where the demand is being concentrated in Barcelona are Paseo de Gracia and Portal del Ángel, the most expensive high street in Spain, where prices amount to €3,360/m2, according to a report from Acotex. “The brands fight for premises, whilst the buyers, normally international investment funds, obtain a return of between 3.5% and 3.75% in Barcelona”, says Jiménez.
The emergence of large stores, through which the major international brands demonstrate their power, certainly has an effect on local businesses. The first and most obvious impact is the rise in rental prices. Joan Carles Calbet, President of Comertia and RetailCat, the new association of Catalan traders, celebrates the fact that increasingly more people want to invest in Barcelona. “But these types of stores distort the equilibrium of the city, because they (the large players) can afford to pay a lot more than local businesses, which leads to very high inflation”, says Calbet.
“We risk losing local businesses, which define the character of the city”, adds the President of RetailCat, an association that represents almost 30,000 local businesses (…).
Original story: El País (by Josep Catà)
Translation: Carmel Drake