Setting up a UK flagship Store – Top five shopping list items

So, you have decided that you want to commit to take a store on the high street. Here are our top tips to help you along the way.

1. Get ahead of the game

As soon as possible you want to be thinking about getting a team on board who will work with you to help manage the whole process from start to finish. These people will often include;

• Solicitors, such as us at Cripps, will be your main point of call once the Heads of Terms are agreed and will work closely with the agent to ensure that the agreed terms match what is included in the transactional documents and protect your position.
• Agents can help with advising on locations and will negotiate the key deal terms, often before solicitors get involved. They will help you sell your brand to the landlord.
• Fit out Team. This will include any designers, architects and contractors who will be involved with your fit out works to realise your vision. They will be able to advise on any technical requirements including the requirement to obtain planning and other consents

2. Incorporate a UK company

• You should consider incorporating a private limited company in the UK at the earliest opportunity as most landlords will require the lease to be taken in the name of a UK company.
• Once incorporated, you should then get any required UK bank accounts and VAT registration in place. Your accountants will be able to help with registering for VAT.

3. Forming a Security Package

• The landlord will want to see that as an incoming tenant you are able to perform all of the obligations contained within the lease – often, this will be in the form of a rent deposit (equal to a certain months amount of rent) or through having a separate guarantor who will be liable to fulfil any obligations under the lease (i.e. non payment of rent, breach of repairing obligations etc). You will need to be comfortable with offering either of these options and this package will have been negotiated at Heads of Terms stage.

4. Payments

• 1. Alongside expected payments such as rent, rates/ taxes and utilities, as the incoming tenant you will be responsible for various payments under the lease which could include –
     1. A service charge – this will be a payment due to the landlord in return for them providing various services
     2. A contribution towards the landlord insuring the wider building
  • Site specific contributions – such as towards provision of Wi-Fi services.

5. Don’t forget to budget for Stamp Duty Land Tax – ‘SDLT’

1. 1. SDLT which is a one off tax payable to HMRC on completion of the new lease. Whilst each lease arrangement will be unique (particularly if there is a rent free), broadly speaking the higher the rent and the longer the term, the higher the SDLT.

How we can help

For more information on anything in this article please contact Summer Gibb or Ed Fowler in our retail and leisure team who would be delighted to help. See next article on top tips for lease negotiations.