London's flagship Chanel store is up for sale, and could attract offers of more than R5 billion
- Chanel's flagship London store has become the first property on Bond Street, popular with designer brands, to come to the market since the pandemic began.
- The store has three floors and was formerly the largest Chanel boutique in the world. Owner SEB, a Swedish pension fund, hopes to attract offers of more than £240 million (R5 billion)
- The area around Bond Street has seen a 73% decline in shopper numbers compared to last year, and COVID-19 has hurt the luxury goods market.
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Chanel's flagship London store is coming up for sale, and the landlord, Swedish pension fund SEB, hopes to attract offers of more than £240 million (R5 billion).
The Bond Street branch of the luxury French fashion house has three floors of clothing, jewellery, and beauty products, and is one of 14 Chanel boutiques in London, though many are located in department stores. When it opened in 2013, the store was the world's largest Chanel boutique.
The sale is the first on the street since the pandemic began, and is expected to attract interest from a range of bidders. Local property agents have speculated Chanel may buy the store itself, but the Abu Dhabi royal family and a range of private investors are also interested, according to The Times.
SEB is selling the store through advisory firm JLL.
The decline in international tourism during the COVID-19 pandemic has hurt the luxury goods market. Even in famous districts like Bond Street, the number of shoppers has plunged. This is also partly because wealthy residents have retreated from London to the countryside, and many are yet to return.
Earlier this month, the New West End Company (NWEC) announced that since the reopening of non-essential retail stores in the UK, visitor numbers to stores in Bond Street, Oxford Street, and Regent Street are down 73% year-on-year.
Turnovers slump, but area remains popular
The slump has hit turnovers. Stores in the area have an annual turnover of around £10 billion, but March to year-end sales are expected to fall to roughly £2.5 billion, according to NWEC, which represents traders in the area.
Despite the drop in earnings, Bond Street is still popular with designer brands. In June, French fashion house Balenciaga took over a lease on the street, while a new store for Italian fashion house Brunello Cucinelli also opened.
The northern section of the street, known as New Bond Street, was last year found to be the world's third-most expensive street to open a business.
Anthony Selwyn, who leads Savills' central London retail team, expects the Chanel store to sell for more than £240 million and achieve an annual rental return of roughly 2.5%, he told The Times. This is slightly lower than the street's average rental yield of 2.75%, as calculated by Savills.
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