Land Securities retail venture to bring 10 overseas brands to UK

This week former Karen Millen international director Sanjay Sharma joined as chief executive of the new venture, which will be a wholly owned subsidiary of the UK’s biggest property company.

The retailers mostly come from the fashion, footwear and cosmetics sectors, said Land Securities commercial director Ronan Faherty, from locations including the US, Europe, Israel and Australia. The aim is to partner with those retailers able to develop some scale in the UK with stores in all the key cities.

He declined to identify the 10 retailers Brand Empire has signed non-disclosure agreements with, but speculation has centred around big international brands that don’t have UK stores, such as Cortefiel, Fnac and Sephora. It is hoped to tie up the first deal within months.

The retailers will sign an affiliate agreement with Brand Empire, under which Brand Empire will operates the UK retail business and the retailer will receive a royalty fee – in many respects like a traditional franchise agreement, although Brand Empire will have more involvement in managing stock.

“We’re taking a huge amount of risk away from the brands by investing in the capex and people,” said Sharma, who added that his operational expertise would be key. “The property aspect is a barrier to entry but so is the operational aspect. In the UK you need to achieve some of the highest densities per square foot in the world to be profitable.”

Faherty said the venture was prompted by research among shoppers to identify the brands they most wanted to see in their local shopping centres, and was not simply an exercise in filling voids. “People are well travelled now and when we asked them that question, they named international brands as the retailers they want to see here.”

He sought to reassure other retailers in Land Securities centres that Brand Empire’s partners wouldn’t get preferential treatment. The brands would open nationally and take space in other landlords’ centres. Faherty has met rival landlords to explain the project to them.