Intu Properties, operator of the national intu shopping centre chain, says it is in danger of collapse should it fail to secure new funding.
Losses nearly doubled to £2bn in 2019, up from £1.17bn in 2018, wiping more than fifth off the value of its estate, now worth £6.6bn. Intu’s value has now dropped by a third in the two years since its peak in December 2017.
The company blamed waves of CMAs and retail administrations as the main contributors, leaving stores empty and pushing down rental income, which dropped 9.1 percent like-for-like in the 12-month period. In 2018, the dip was just 1.6 per cent, and it expects further reductions in 2020.
“In addition to having been a challenging year, 2019 has been a year of change for Intu,” says CEO Matthew Roberts, who has yet to complete his first year in the job.
“With the pace of change accelerating in our sector, radical transformation was required, so we carried out a comprehensive review of the business and tested our findings to develop the strategy,” he adds.
“Our review of the business looked at the risks and opportunities of the evolving retail market, and along with an assessment of our underlying strengths, helped formulate our strategy for the next five years.
“This will reshape the business by way of four strategic objectives I am pleased to say we have already taken steps to deliver this strategy.”
Options to raise cash include selling off more assets, negotiating rates with lenders and refinancing its £4.5bn debt.
Despite the store closures, footfall actually rose in 2019 by 0.3 per cent. Interestingly the retail operator said the coronavirus was yet to impact visitor numbers, with footfall figures at its centres broadly unchanged in the first 10 weeks of the year.