Via Yahoo Finance

A branch of House of Fraser in one of London’s top shopping centres could be turned into a WeWork-style office space, in the latest indication of the tough environment for retailers and their landlords.

An application to Hammersmith and Fulham council by the owner of the Westfield London includes a plan to convert about two-thirds of the 104,000 sq ft (9662 sq metre) store into a co-working space.

No operator has been lined up to run the office space as yet and Westfield is considering running the operation itself if no viable alternative emerges, according to Estates Gazette, the trade journal that first reported Westfield’s plans.

Another department store chain, Debenhams, recently exited the west London shopping centre after Westfield refused demands for hefty rent cuts. The space is being converted into an outlet store for Harrods.

The House of Fraser’s store will reopen this week. The shopping centre’s owner, Unibail-Rodamco-Westfield, said the planning application for the House of Fraser site was only in its early stages and there would be no immediate changes. It said the redevelopment was part of a strategy to include more interactive experiences at its shopping centres.

The Westfield application is one of several under way around the country as the landlords of House of Fraser stores line up alternative uses after the chain’s owners have demanded steep cuts in rent or rent holidays.

Mike Ashley’s Frasers Group, the owner of Sports Direct which bought the chain out of administration in August 2018, has closed about 10 of the 59 stores it originally acquired as it weeded out those judged to be performing poorly or had been ousted from by landlords. Outlets in Birkenhead and Milton Keynes were the latest to close just before lockdown.

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Landlords have sought permission to rejig House of Fraser sites in a number of other locations including Reading, where bowling and crazy golf are being considered as a replacement. A housing development is being considered at the Lakeside shopping centre in Essex while there is a proposal to bring in office space and a gym at the Oxford Street site in London, and plans have been approved to demolish the store in Lincoln and build a four-star hotel.

In Hull, where House of Fraser closed last year, the the site is being redeveloped into a food hall similar to developments in Altrincham, Leeds and London.

Landlords are having to be creative to fill space and find new ways to attract visitors as bricks-and-mortar shopping has become a less popular. The pandemic has only added to fears for their future.

House of Fraser’s closures come after Debenhams permanently closed dozens of outlets this year. John Lewis has warned it may not reopen all 50 of its stores. Smaller department store chain Beales closed all its 23 stores after collapsing into administration in January.

Sara Boonham, director of retail at the property consultancy Gleeds, which is advising on possible redevelopments of a number of department store sites, said Covid-19 was accelerating change.

“Towns and city centres were already undergoing a period of dramatic change, moving away from retail as the anchor. They will be further reshaped by the work from home revolution, with the retail scapes in such centres completely changing,” she said.

Against this backdrop the situation is deteriorating for the traditional, mid-market department stores that have already been living on borrowed time as they continued to “be all things to all people”, Boonham said.

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She said landlords were looking at bringing in family entertainment, interactive leisure and wellbeing startups as well as live music, events and hospitality venues.