The Interview: Simon Quayle, Executive Director, Shaftesbury
This year marks the 25th anniversary since retail estate investment trust company Shaftesbury PLC acquired the majority of the Carnaby estate in London’s West End, comprising the world famous Carnaby Street and its 13 surrounding streets.
Going back to 1997, when Shaftesbury was on the verge of making its offer, Carnaby Street was quite a different proposition to what it is today. In fact, it was quite tatty version of its former self, filled with downmarket tourist shops and cheap jeans stores, having once been the epicentre of fashion and the birthplace of ‘Swinging London’ in the 1960s.
In the late 1970s and early 80s the area became something of a Mod hangout, retaining some element of cool before its slippery slope into a tourist trap. It was Shaftesbury, headed by the direction of Executive Director, Simon Quayle, who had a vision to return the area to its former glory, with a new strategy focusing on attracting new up-and-coming brands and designers, independents and concept stores from established brands with a point of difference, as well as UK firsts for international fashion brands.
Quayle tells TheIndustry.fashion about Shaftesbury’s Carnaby story so far.
How did Shaftesbury come to acquire the majority of the Carnaby estate in 1997?
Going back slightly earlier, to 1994, we bought a small lot of properties which included four shops in the south end of Carnaby Street, and a few small shops on Beak Street. We didn’t actually have intentions of acquiring more of the area at that time. However, in 1996, we were approached by Wereldhave, the Dutch company that then owned about two thirds of what we own now, to see if we were interested in acquiring what they had. They were quoting £69.5m for their parts of the estate. It was certainly of interest to us and, because by then we’d ‘lived’ at the bottom end of the street for two years, we had a bit of a feeling for it. We then got our property agents to help us appraise it and we came to a value in excess of £80m.
We knew it was going to be a very competitive market, with a lot of people interested, so, because it was a closed bid situation, we actually decided to bid £90m in the end as we believed it was a game-changing acquisition. We completed the purchase in February 1997.
What did Carnaby Street look like then?
It was generally quite tatty looking. If you think of a lot of the shops down east Oxford Street, it was along those lines, though there were a couple of decent stores on Newburgh Street. Carnaby Street was filled with cheap fashion stores and quite a lot of tourist shops with ‘kiss me quick’ style hats. Not a good look. The reason why the tourist shops came to the fore was because in the 60s Carnaby Street was really the birthplace of British fashion.
It then had a bit of a lull, but in the 70s and 80s it became a bit of a Mod centre, before becoming a bit of a tourist trap. A lot of tourists and coaches with kids were still coming to the area because they’d heard about what it was like in the 60s. They didn’t have much to spend, they just wanted to buy a hat or something and then go off and do the rest of their tour of London.
What attracted you to it then?
Not only is it such an iconic location, it’s one of the best locations in the West End of London – between Regent Street and Oxford Street, with Oxford Circus tube station around the corner and Piccadilly Circus just up the road. It’s the best part of the best city in the world, and with such amazing heritage we saw real potential.
How did you initially go about changing the look and feel of the area to make it a more desirable place to visit?
It was a leap of faith. We knew what the potential was, but we also knew we had to invest in it long-term. To a certain extent, we had to take a step backwards before we could go forward. What we effectively set about doing was buying out a lot of the leases from some of the less desirable retailers. For example, the corner unit that is now Office, we originally paid around £500,000 for the lease from what was a shabby looking jeans centre and army surplus store.
Referring to Carnaby Street at the time, an amusing cartoon in the Evening Standard said ‘my dad went to London and all he bought me was this lousy street.’ That kind of summed it up! We knew we had to change that. When we first got involved, we didn’t want to refer to the past at all, because people were so disappointed when they arrived. So, we avoided any real messaging about the past, until we got to a stage where we were confident to talk about it. It is now a destination in its own right again, so we can go back and appreciate the past.
How did you go about the reinvention?
What we did early doors was called the whole area Carnaby, encompassing 14 streets including Carnaby Street. Though Carnaby Street is very much the backbone, it’s also very much about all the other streets that have their unique character and make the whole. There are stores of different sizes in different locations, with varying rental levels, and with the likes of Newburgh Street, Ganton Street and Marshall Street, we can be more imaginative and creative with who we put in there, because it’s less risky for us and for potential tenants too.
What was the general retail landscape like when you got properly got involved 25 years ago, and how has that changed?
When we first got into retail, it wasn’t unusual to have a 25-year lease for a shop on Carnaby Street. That whole move away from saying you have to sign your life away for 25 years was probably one of the most important things we made the decision on right from day one.
Obviously, in the larger shops with higher rents, the leases still tend to be longer, so maybe 10 years now. But, in the smaller shops, the leases are more like five years, sometimes three years. That trend has actually increased, and you will find that most retailers don’t want to take anything on for more than five years, and there’s often breaks put in to contracts where they can opt out if it’s not working.
What was the first brand you initially brought in?
It’s very easy to say that you’re going to turn the area back into the fashion retail mecca it was, but the proof is in the pudding. So, we decided that we would allow the right type of people to take short-term leases. There’s a lot of talk about pop-ups now, but we really started pop-ups 25 years ago. One of the first retailers we put in was All Saints. We discovered it in Hyper Hyper in Kensington, which back then was like an old-style Dover Street Market for up-and-coming brands and designers. We got talking to the All Saints owner/designer, Stuart Trevor, who had a small stand in there. We said we had bought in to Carnaby Street and we had a little unit on Foubert’s Place which we offered him to take so he could have his own place rather than being in a multi-brand environment.
We initially offered it to him for three months, and we said if it works then great, but if it doesn’t, he could just walk away. He came and eventually took a five-year lease. It ended being so successful that he expanded into next door as well. AllSaints then became a hugely successful UK brand and it eventually moved out of Carnaby and onto Regent Street. We were quite happy when that happened. We just moved on and got the next one in to grow their business. Interestingly, Stuart came back to us when he left AllSaints to set up shop with his new brand, Bolongaro Trevor, on Broadwick Street. So, the whole thing started again. It’s a nice story.
Was Diesel also one of your early Carnaby signings?
They were indeed. They had a store in Covent Garden, which they were going to refit. We’d met Pan Philippou, who was then CEO of Diesel, at trade shows such as 40 Degrees and Bread & Butter. He came to us and asked if we had a store they could use in Covent Garden while they were refitting their store. I said we didn’t have anything in Covent Garden, but we did have one on Carnaby Street. He said he wasn’t sure about Carnaby Street, but limited alternative options meant he took it. Diesel ended up trading so well that they staying permanently, and expanded to next door as well.
The thing was, we had the confidence but it was about getting others on board to feel the same confidence. Once they came in to the area, and realised the type of customer that was coming in, combined with all of our marketing, PR and the mix of brands we were curating, that created the confidence.
It was a matter of saying to people, effectively you’ve got to work with us, and we’ve got to work with you, and if it works for you then it works for us. If it didn’t work, we weren’t going to hold anyone to a long-term deal. Diesel is still with us on Carnaby Street, as is beauty boutique Pixi, which opened its original flagship store on Ganton Street in 1999, later moving to Foubert’s Place.
How has the brand mix evolved?
It’s evolved how fashion has evolved. It’s interesting to look at some of the retailers and brands that used to be in the area, like Shelleys, Mambo, O’Neill, Burro, John Richmond, Lonsdale, The Dispensary – they all tell their own story of the area. Things have changed, but it’s always been about the same ‘types’ of retailers.
Carnaby Street has always predominantly been directed at the youth, so 18-25 year-olds really, though it’s a slightly older customer profile on Newburgh Street with the likes of Mark Powell – who’s been with us since day one in different locations – and Red Wing, which was a UK first which continues to be a real draw.
We’ve always tried to get something that’s different, even the Fred Perry store carries product you can’t get anywhere else. We could have filled the area with all your usual high street retailers, but right from the start it was a decision to not take that route. It’s always been about trying to get independents and new creative brands in.
What about if it has been larger brand wanting to come in?
If it has been a larger brand, then we have specified that they need to do something different compared to their other stores elsewhere. For instance, we’ve now got the new upsized Adidas store on Foubert’s Place, but it’s what they call their ‘neighbourhood store’. They sell product in there that they don’t sell in any of their other stores, and they have a personalisation service. It’s more of an experience, and they’ve even got special artwork they’ve created just for that store. It’s a beautiful store, which was formerly Jack Wills.
The Levi’s store on Carnaby Street carries different product and has a different customer profile to its Regent Street store, and Puma have always kept their store on Carnaby Street fresh and interesting, with regular exclusive products. That’s why they’ve been with us for nearly 20 years. MAC cosmetics have been with us a long time too, and size? continues to be a major draw – especially since they upsized on Carnaby Street.
Store design has massively improved over the years, and it has to be more than just about product now. It has to be about experience and the merging of digital and physical, especially as the pandemic accelerated the rise of online shopping.
What other stores are looking more towards creating an experience?
The Timberland store is a good example, as they really get across their sustainability credentials with the store design and in-store talks and workshops. Then there’s The Rolling Stones global flagship store, RS No.9, which is a real experience for fans of the band, with lots of exclusive products and collaborations with fashion brands – the latest one being with rock ‘n’ roll jewellers The Great Frog, who have had a store in Carnaby for 50 years this year. They were actually quite sceptical of Shaftesbury when we first came in, but over the years there’s been a mutual respect.
It’s also fitting that the Stones have a store on Carnaby Street, as they used to get kitted out at the likes of John Stephen and Lord John on the street back in the 60s. A time when Don Arden, who was the manager of the Small Faces, used to have his office on Carnaby Street too. We have a plaque up in celebration of that, as the area has a lot of musical heritage as well as fashion. We actually do a tour of the area in recognition of all of its music history, which again is about creating another reason to visit.
How important is physical retail to a company that has a thriving online business?
To take a prime example, End, which has an amazing store on Broadwick Street, told us within a couple of months of opening that their app downloads increased significantly within the catchment of the store. We have been told many times by retailers opening stores that a physical store will increase brand awareness. Opening a shop in our locations will have a halo effect on their online sales, increasing both online sales to add to in-store sales.
How important is it to get the mix right between fashion, beauty and lifestyle retail and the food and beverage (F&B) offer?
It’s critical, as the two work hand in hand. We’ve got 100 retail units and 60 F&B units and, while the complementary areas next door are Regent Street and Oxford Street, which are very important because they provide a different offer, but where do you go to eat and drink in either? Having a strong F&B offer means we can draw more people in to our location.
We’ve always said that, for Carnaby to be successful, it had to appeal to Londoners. If you get it right for Londoners, the tourists will come. And I think that’s why we’ve been successful. We all know ourselves that when you go abroad you want to go where the locals go, because that’s where the cool places are.
What was your stance with tenants during the pandemic?
We’re about working with people we want in our mix, and we wanted those tenants to still be here when the pandemic ended. Of course, there were some casualties, but the majority are still here. Our view was, we were going to help people out as much as possible. So, when there was a lockdown and they couldn’t trade then we didn’t charge them any rent, pretty much across the board. Some of the larger retailers, with big internet sales even got a concession, if not a 100% concession, but the majority of our tenants got a full concession if they couldn’t trade.
In most cases, that appears to have paid off – for them and for us. Footfall is now returning to closer to 2019 pre-pandemic levels, and we’ve not even really seen a major return of foreign tourists yet, though there has been plenty of domestic tourists.
Are you now seeing increased demand for retail space?
There’s plenty of demand. There was a lull, obviously, when people really didn’t know what was happening, but not only did we support people during the pandemic so they could stay, rental levels have dropped. It has led to increased opportunities because the costs are lower, and terms are more flexible. It’s creating an even more interesting mix.
New tenants that came in during the pandemic include Aubin, from the founder of Jack Wills, and Annie’s Ibiza on Newburgh Street, as well as a first standalone store for piercing and quirky jewellery brand Metal Morphosis, who used to have a popular concession in Topshop on Oxford Circus.
Christopher Raeburn has also now signed permanently after a successful long-term pop-up, and another nod to the area’s musical heritage was the opening of Third Man Records on Marshall Street last August. It’s another UK first, and it’s owned by Jack White, lead singer of The White Stripes, who’s another big fan of the area.
More new additions include the first dedicated menswear store for Toast on Newburgh Street, and Nicce’s first ever store on Carnaby Street – on the corner of Beak Street. There is always newness, but plenty who have been with us for a long time.
So, what’s next for Shaftesbury?
It’s more of the same, but making sure we stay relevant. It’s important that we’ve got a good young team who understand retail and, like retailers, we can’t be complacent, we have to keep pushing forward. We’re looking forward to the next chapter in Shaftesbury’s Carnaby adventure.