How Tattoos and E-Cigs are Propping Up U.K.’s Shopping Streets
(Bloomberg) -- Ten years ago betting shops and pawnbrokers snatched up Britain’s vacant retail shops. Now, tattoo parlors and e-cigarette merchants are filling that empty space -- and there’s plenty of it.
One in ten retail sites in U.K. town centers is unoccupied, according to researcher Springboard, with the recent collapse of the BHS department-store chain leaving even more space unoccupied. Among those rushing to fill that void are body artists, who have boosted the number of tattoo parlors in the U.K. by 79 percent over the last six years to 2,288, according to retail industry analyst LDC.
Those newer entrants are a short-term fix, say analysts, who predict more churn in the years ahead as the U.K. economy weathers Brexit and more stores succumb to the rise of e-commerce. British consumers, who are global leaders in online shopping, increasingly head to local shops for services and experiences rather than physical goods -- but trends like vaping and tattoos can change quickly.
“These are relatively new concepts that haven’t been tested through the thick and thin of economic and real estate market cycles,” said Hugo Clark, director of real estate at consultant Deloitte. “They’re at risk if the economy dips or consumer behavior changes.”
Among the entrepreneurs leading this makeover of British shopping districts, known as “high streets,” is 38-year-old Tom James, who opened the Purple Rose Tattoo Parlour in Bristol, a city in southwest England, five years ago. After initially only renting a third of the premises, demand was such that within two months he struck a deal to rent the whole shop. Customers range from a 75-year-old who treats herself to a fresh tattoo annually on her birthday to nervous 18-year-olds getting inked for the first time.
“Social media has played a massive part in their growth in popularity and now more celebrities are getting them,” James said. “They’ve become much more acceptable.”
Soccer star David Beckham was among the first celebrities to embrace body art. Even Samantha Cameron, wife of the U.K.’s former Prime Minister, has a dolphin inked on her ankle. According to a poll last year, about a fifth of British adults now have a tattoo.
Landlords are luring tattoo artists as they’re unable to find more traditional tenants for vacant properties. Among the most common incentives is offering six months rent-free, said Michael Weeden, former director of Britain’s independent retailers’ association.
Without a tenant in their property, U.K. commercial landlords are liable for business-rate taxes which are roughly equivalent to 40 percent of the site’s rental value, according to Deloitte’s Clark.
Vape shops are another increasing feature of Britain’s shopping streets. Over the last six years, the number of U.K. tobacconists -- primarily e-cigarette vendors -- has more than quadrupled to 1,783.
Vape Emporium was set up in 2013 by 38-year-old Andy Logan to ease ex-smokers away from traditional cigarettes on to modern alternatives. Logan employs former smokers at his shops in the London districts of Hampstead and Richmond to consult with health-conscious customers looking for a less damaging nicotine hit.
“People come in and they are physically shaking at the idea of giving up cigarettes,” he said. “They’re anxious and we need to be in front of these people reassuring them.”
By offering consultation and a tactile experience, businesses such as The Purple Rose and Vape Emporium are giving customers something they can’t get online. Having little inventory also helps keep down startup costs and means they can operate from smaller spaces.
The popularity of tattoo parlors and vape shops could just be a passing fad. But for retail landlords facing the prospect of empty storefronts, “beggars can’t be choosers,” said Richard Hyman, an independent retail analyst.