Masterton franchise to shut doors

ANOTHER TO GO: Masterton's Bed Bath and Beyond is closing next month, reflecting tough times for landlords as well as retailers. PHOTO/LYNDA FERINGA

Bed, Bath and Beyond is the latest Masterton store on the chopping block - with franchise representatives blaming "unrealistic" rental costs.

The Queen St branch of the retail chain will close at the end of April, much to the disappointment of Wairarapa shoppers.

The store, which has been three years at its current site, is one of a string of central Masterton retailers who have shut their doors in the past 18 months, citing high rents and competition from "big-box" outfits.

But those working in the commercial real estate sector say exorbitant rents are not at fault, but a lack of foot traffic.

Bed, Bath and Beyond retail chief executive Trevor Brown said the company was "unable to negotiate a reasonable lease" for the Masterton shop with the building owner.

He said the store would be unable to make a profit while keeping up with rent increases.

"It wasn't going to be economical going forward," Mr Brown said. "It's been very disappointing - but if we can't run commercially viable stores, there's no point."

Mr Brown said he was told Masterton landlords were "under pressure" and were raising prices due to earthquake-related concerns.

"But some landlords are a little unrealistic in their expectations - I guess that's their prerogative."

Property Brokers Wairarapa regional manager Guy Mordaunt said rising insurance premiums following the Christchurch earthquake had been a concern, with landlords finding it difficult to negotiate with tenants.

"Building insurance has been a sticking point," Mr Mordaunt said.

"Commercial real estate used to be a stable asset - but since Christchurch and the concerns about structural safety, that stability has flopped a bit.

"Earthquake insurance is a lot more expensive, so landlords have to be much more rigid with their pricing."

Rental costs were only part of the problem, Mr Mordaunt said - with a more pressing issue foot traffic and a lack of enthusiasm for the Masterton's shopping district.

"Our rents are not oppressive - if Bed, Bath and Beyond were making a fortune, they'd be able to pay the rent.

"People aren't spending money locally - they're either shopping online, or going to Wellington and Palmerston North.

"Landlords lowering their rents aren't going to solve that problem - it's about finding ways to encourage shopping in Masterton."

Mr Mordaunt said Queen St in particular had become less desirable to customers and "big brand" stores.

With retailers running inconsistent opening hours, and eateries and banks relocating either to Chapel St or towards the suburbs, businesses and shoppers had less incentive to stay.

"Masterton is too small a town to be fragmented like that, with all its shops on the outskirts.

"If you don't keep your town centre alive, it affects how the town feels about itself."

Bed, Bath and Beyond is the latest Masterton store to founder, with Hallensteins and Masterton Toys and Vinyl Heaven, among others, closing in 2013.

Times-Age readers expressed shock and sadness on Facebook, saying Bed, Bath and Beyond was one of their favourite stores, and calling the closure "a shame" and "a real blow" to Masterton.

Several commenters questioned the CBD's ability to "hold good shops", blaming "rent hikes", "greedy landlords" and "online shopping".

Mr Brown said the store's three workers had been offered the chance to relocate to the Upper Hutt branch.