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....and before we get the inevitable "You forgot about Verde, ner-ner!" comments, that will only have 5% of the market, taking Lloyds down to 25% and Co-op up to 7.5%, as the article "Taking on the 'Big Four' banks is the hardest job on the high street" makes clear.
http://www.guardian.co.uk/business/2012/apr/06/challenging-big-four-banks
Retail banking is not a loss-leader. At the moment it is, in principle, a rather profitable industry, with pretty wide spreads between what banks pay in interest to savers, and what they charge on loans to borrowers.
Three things are dragging profits down, leading to losses at the likes of LBG:
- legacy mortgages where the spread over base-rate was much lower than today - e.g. baserate + 0.5%.
- PPI compensation (this is the biggest thing)
- continuing bad loans.
Looking at LBG for instance, underlying profits on retail banking were £3.2 billion in 2012. Underlying losses from commercial banking were £0.3 billion. Underlying losses from "wealth, asset finance and international" were £0.9 billion, and insurance made a profit of £1.1 billion.
I'd even doubt that current accounts are a loss leader. They are an incredibly cheap form of finance for banks (very low interest rates, usually), and a useful source of income from charges, overdrafts, and a good marketing tool for further products.
Anyway, this thread is meant to be about retail not retail banking...
I'm desperately trying to think of something - anything that will bring the subject back to "City Centre Retail"...
There is an application by Paddy Power to open a betting shop in the ground unit of the Central Market (previously Bauhaus hairdressers and before that H Samuel).
I suppose its better than an empty unit but I can't help feeling a bit disappointed that such a prominent unit in a listed building (one of the few grand 'commercial' buildings in the city centre) will be another bookies. Off the top of my head that will make it 5 bookies in St Mary Street plus the new Ladbrokes in Caroline St and Bet Fred in Church Street.
PaddyPower by the market has been speculated for a while. As someone who is just leaving the industry, Hayes News have known and told us a few weeks back that they'd received an order to provide PaddyPower with Display Papers/RP. It's ridiculous how many LBO's there are open now in the area, with Ladbrokes opening on Caroline St and not long before that on Queen St, and Coral opening on Churchill Way. It's all about the FOBT machines, horrible they are, do you limit each shop to 4 forcing the clustering of bookies or allow them to have more and become de facto casinos.
Still more choice for consumers and more jobs on the flipside.
Lloyds makes losses on its commercial lending. It makes profits on its "retail banking" operation which includes personal loans, mortgages as well as savings and current accounts.
As an accountant you should know that the profit a bank makes is traditionally the spread between what it pays to depositors/savers and what it charges lenders. Thus, it is silly to try to count profits separately on the "deposits" part of its business separately from the "lending" parts of its business: the cheap money it gets in deposits which it then lands out at much higher rates to those wanting personal loans, credit cards, and mortgages is very much one of the drivers of its profits. You can try doing some transfer pricing based on what it would need to pay for the funds on the marketplace... and the fact it has those funds cheaper would then show up as a "profit" on the deposits!
And their Wealth, Asset Finance and International division is currently the largest contributor to losses in the business.
Cambo
All banks analyse their profitability by Lending NII and deposit NII with OOI making up the rest of the income side of the P&L. That is just the way they do it. Without giving too much away I know this to be fact. That is how banks operate. They look at net interest income (NII) which is the lending customer income less the cost of financing that income (LTP / ITP) or deposit customer income (a cost) plus the associated ITP/LTP (which in this case is income). It is most certainly not margin from lending less margin from deposits as you have claimed. Banks need to know how they are deriving their profits and whether it is coming from their Lending operation or deposit operation. Both are different products and drive profitability in a different way.
WAFI (or specifically Asset Finance) made a profit just short of £1bn this year. The Wealth and International is a bit of a dog but the non core part – Asset Finance – is looking to be hived off in the longer term as it doesn’t fit with LBG’s overall strategy of being just a retail bank. Sorry I should have explained that one better.
You really don’t need to try and give me an overview of financial services or banking more specifically. It is an industry I am extremely familiar with, having worked in various banks on various projects over the last 14 years or so.
May have already been mentioned, tesco have applied for a licence to sell alcohol in a new store in st davids house, wood street. The march of tesco shows no sign of abating.
Hmm and there was me thinking they might have been emptying that building for demolition!...
Maybe it could be demolished after the Tesco has opened.
The hoardings are down on the large empty unit at the High Street Entrance to the Central Market (the old Hill Samuel). The good news is is that its secured a tenant. The bad news is that it's Paddy Power.
Seriously, I'm not sure this proliferation of bookmakers is healthy. The "sports betting" element is really little more than a front for highly-addictive gaming machines these days.
I'm starting to wonder what the point in the pedestrianisation was as there is
no reason to walk down High Street / St Mary Street. There's nothing there.
I wonder how Run and Become will fair?
Far from exciting news, but PoundWorld will be opening in the Capital Shopping Centre!
It will be replacing Internationale (right of H&M)
You're right, there simply is no reason to walk down there anymore.
The street needs to find a new identity, other wise, it WILL go to rack and ruin. I personally like the idea of turning it into an alternative area, like Camden, or South Street in Philadelphia.
Imagine St Mary street with wall-to-wall tattoo parlors, bars, clothing shops, and strange restaurants, all with neon signs and the like.
It doesn't necessarily need to be what I mentioned, but it does need to evolve into something else. We already have a modern shopping street, complete with shopping centres, a clubbing/gay area, and a swanky restaurant area in the bay. It needs to evolve, but if it wants to thrive, then it has to be something new.
I wouldn't mind seeing it as mini-Camden, and think that it would both blend into the area well, yet still stand out.
I guess the Capitol will be dropping their 'fashion centre' marketing then? Tesco and Poundworld, oh dear.
Think it's time to re-configure the centre as a proper walk through from the station. I imagine that H&M could take the current Primark unit once they move over to BHS which would be another nail in the Capitol coffin.
According to Retail Week (search for "Primark - What is the secret of its success?", as if you go direct to the article it won't load), Primark will be keeping its existing store when the new St David's Store opens in 2014. Which is a bit surprising given they are virtually opposite each other!
Perhaps the smaller one will become mens' and childrens' wear and the larger new one will be womenswear and accessories? But it will mean Primark having something like 130,000 square feet of selling space in the city centre. This will put them behind John Lewis, Debenhams and probably House of Fraser.. but likely ahead of Marks and Spencer's (I think). But all of those are 'department stores' to some extent with either large homeware, electrical, beauty/perfume or food offerings. So Primark will be the biggest fashion retailer in the city. Bit of a change compared to 8 years ago when they had that crummy store next to the old Waterstones on Hill Street.
If that is the case, where will BHS go if its looking for a store? (They did say they were interested in somewhere smaller in the city centre). A smaller unit in St Davids? The only MSUs are the "Forever 21" store and the one next to John Lewis (where Hamleys was originally going to go). My favourite options would be either:
- for them to anchor an expanded Queens Arcade - a circa 30,000 square foot store might be enough and should be deliverable. Wilkinson, who are lined up for Queens Arcade could then take a unit in the Capitol centre. This would confirm the move of Capitol away from fashion and more towards "everyday" items.
- or vice versa. A BHS in the Capitol centre making use of, for instance, the Odeon space and a bit more of the upstairs space could easily reach 30,000 square feet. This would bolster the Capitol's fashion credentials whilst being in keeping with its more "low - mid market" evolving tenant mix. And keep Wilkinson's in the Queens Arcade extension which is a bit of a hotch potch of different types of retailers anyway.
What do people think?
The article doesn't confirm that Primark will definitely be keeping the current unit and I reckon that it would be too big for BhS.
The former Hamleys MSU next to John Lewis was under offer as far as I know. Not sure if SD would want BHS in that area of the centre but it's been empty for 3 1/2 years so I guess they're desperate to let it. Same for the alleged Forever 21 unit.
I'd love to know if there are any plans for the Capitol. As they've just re-let the Internacionale unit to Poundworld I guess there isn't any major restructuring planned. Amazing that they've sat on the empty Odeon for so many years considering it's prime spot next to the station.
The Queens Arcade refurb has gone very quiet, has been 18 months since it was announced and I think CCC planners rejected the fascia. I think BhS would be a better fit for there than SD though.
They could be looking at the Habitat building but that would be a terrible use of a lovely building IMO.
Paddy Power have put in their application for the unit underneath the market. It appears that they will be removing the green tile effect that has been there since the 70's and are assuming that the stonework underneath is still intact. I hope that is the case. Notwithstanding that fact that St Mary Street needs another bookies like it needs a hole in the head at least it will look better.
There is also an application to turn one of the empty units in the Capitol into a laser eye surgery place. In fairness to Capitol they have come back from the brink - Pret, Cafe Nero, Poundland, Tesco, Easy Gym etc etc. Nothing exciting but lettings all the same. I do wonder how long stores like Fat Face, Dune, H & M, Austin Reed, Hobbs, Phase 8 etc etc will want to remain there. Most of them have stores elsewhere and the emphasis in the Capitol has certainly changed over the last year or so.
Primark will not be keeping both stores.
Going back to the Habitat unit, perhaps its not "Under Offer":
http://www.shopproperty.co.uk/PropertySearch.aspx?Address=Hayes
According to ShopProperty, a "basement restaurant unit" in the same building is under offer, but the main store unit is still available. Which is a bit disappointing if true. However, this website is sometimes rather out-of-date so things could have changed since it was updated.
Isn't La Fosse the basement restaurant referred to? They've just closed. 
Is there anywhere else in the UK where you can find a poundland in between a waitrose and a Laura ashley?
Not for long, that Laura Ashley is closing! It is quite an eclectic mix.
I went past the Habitat unit today. There is a sign advertising the restaurant unit to let. There is then a larger sign on the upper level of the building advertising a retail unit to let with 'under offer' plastered across it. That suggests to me that the Habitat unit is under offer and not the basement restaurant (which appears to be having some work done to it already, although this may just be removing items belonging to the previous tenant).
Also the former Pizza Hut unit in High Street is 'under offer'.
During my regular aimless lunch hour wanders through the city centre I noticed a few closures. The Malaysian restaurant next to the little O'Neill's in Trinity St has closed - should have painted the restaurant red and they could have been doing a roaring trade.
The cup cake cafe in Royal Arcade has closed (no surprise there - haven't they passed their sell by date?) as well as the Silver Studio. Also Eden Park seems to have closed in Morgan Arcade.
I've been told that today is the last day that the NatWest will be open in St Mary Street. I wonder what will become of the building?
I'm glad the Natwest on Queen Street is to remain and not the other way around, however that building is more impressive than the 'small town' appearance of the Queen Street branch. Their little s**** at the moment for closing branches...Park Place being another victim.
Can't whoever owns that building, and the adjacent former Barclays at least keep them clean?? The area is soo shady though, not ideal for a bar or a coffee shop...
Has Barker Coffee further expanded yet? And what about their tea place?
It's a shame that their saturation zone doesn't extend over bookies. Surely they are more damaging to society than a few punch ups down Chippy Lane
I see that the Burger King outlet by the castle is totally covered up with scaffold. This happens about every five years.
This corner building (although not exactly an architectural stunner) could nevertheless be made to look much more impressive by the right choice of paint (and in a dream scenario - by placing lighting behind the stained glass panels on the top floor windows) but I suspect it will be another coat of beige without any sub-toning to highlight the exterior stonework.
Fingers crossed.
I noticed this and thought exactly the same thing. I don't think it would take a huge amount of planning to mix up the exterior paintwork to create something more eye catching. In that street the Cafe Nero and Greggs buildings would also benefit from some more adventurous paintwork. Gamlins building at the southern end of St Mary St has just undergone a paint job in a very fetching pale green and it looks much better for it.
In relation to the BK building I have been in the room with the stained glass windows and it is stunning. I understand that the building - or at least part of it - used to be the Green Dragon pub and the upstairs room was used for dining. I've been told that it was a favourite haunt of the various placemen of the Marquis of Bute as well as local dignitaries. Now sadly locked away. How many of those who stuff their faces with beef patties just feet away know of it's existence? There is also an interesting document hanging on the wall of the Rummer Tavern which I think is a copy of it's license from sometime in the late 19th century. It lists all of the local pubs within a 50 yard radius of which there are many including the Green Dragon. Some of those listed remain as pubs in altered guises - the Tennis Courts (now the Owain), the Rose and Crown (now Bogiez) but lots of others are long gone.
My understanding is that the burger king has just undergone an internal refit (only looks slightly better IMO). Perhaps the exterior works are to do with this? I always thought this corner would be an ideal place for a Patisserie Valerie, something i would dearly love to see in Cardiff!
Looks like myself and Wizard have our wish - the Burger King building appears to be having a decent paint job. The architectural detail around the windows is being painted a light brown whilst the walls are being painted cream.
In other news there is an application for a William Hills in the old Saks unit which is between the Owain and the entrance to High St arcade. At the moment there is a Corals directly opposite, a Bet Fred in Church St and a Ladbrokes in the old Pizza Hut building in Queen St. Am I missing something? Why are betting shops becoming as ubiquitous as coffee shops? Is betting on horse and dog racing that popular? I always thought it was a bit of an old mans pursuit and on the very rare occasions I do go in a bookies the clientele are almost always all male and are mostly those approaching the autumn of their years. So why are Ladbrokes et al prepared to pay presumably huge rents for multiple city centre premises?
Thanks for that. Can you elaborate?
Good news on the Burger King front (first time I've ever uttered that phrase). I hope it's not just an undercoat!
In other news, it appears from your 'Saks update' that the betting shop bonanza continues unabated. If it wasn't for the fact that they are major listed companies, you'd be forgiven for suspecting that they were a front for money laundering purposes.
Bearing in mind the exponential rise in online gambling options over the past decade then you'd have thought that the physical presence of Brokelads et al on the high street would have been flat at best. Shows how little we know. There indeed must be gold in them thar shops.
Anyway, I have to go now - there's a dog that I fancy running in the 11.57 at Lingfield. A dead cert.
Not forgetting Betfred near the market, opening soon?
I guess business rates are high and other than the big retailers who are focussing their investment on St Davids and the Hayes, who coulsd afford it?
At least it won't be a pound shop or 'closing down sale' shop...
On the plus side, they generally tend to keep their shops in decentish condition... and it's only a small unit. Why did Saks even close? They have branches in London etc that are still going...
Thanks for that Ash, it certainly explains a lot.
Looks like Roosters Piri Piri are making an application for 2 St Mary St - this is the unit next to Greggs. I think they pitch themselves as not quite Nandos but a step up from KFC/Miss Millies etc.
Also Pierre Bistrot are making an application for the former Thai Edge unit in the Brewery Quarter. Interestingly they want to open up the facade facing Caroline St and they think that it is inevitable that Caroline St will be dragged upmarket with the Hayes now being the focus of retail in the city centre. I suppose the refurbs at the Duke of Wellington and the Kings Cross support this although other recent additions to the street include Greggs and Ladbrokes. Time will tell.
Also in answer to the question posed above re Saks - the reason the salon closed in Cardiff is because it was a franchise. The franchisee pays a fair whack to use Saks name and products but in reality it is a stand alone business like any other.
as an aside...Caroline Street. I can see it raising its game somewhat. After all its only 100 yards or so in length. It also has a good start with the Duke and Corner House add a bit of elegance to it, along with the Brewery Quarter. There are already one or two decent looking eateries on the takeaway side of the road. What really lets it down (and is the point I am getting to) is the great big hole half way along the terrace.
does anyone know what happened there? That gap in the building has been there as long as i can remember. Are there any plans afoot to redevelop and put something else in its place?
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