Has Stuart Machin lost his marbles over Gove’s M&S store plan kibosh?

Stuart Machin is seething. Last week, plans for a new M&S flagship store in Marble Arch were scuppered at the 11th hour by levelling up secretary Michael Gove.

“Utterly pathetic,” bristled the CEO, indicating the supermarket might leave Oxford Street after close to a century, “on the whim of one man”. The decision was “a short-sighted act of self-sabotage by the secretary of state” Machin fumed.

The supermarket had wanted to demolish its Marble Arch flagship – a “1929 art deco landmark” and “important interwar building” according to Save Britain’s Heritage – and replace it with a retail and office complex, which M&S claimed would be “one of the most sustainable buildings in London”.

Gove disapproved and kiboshed the plan. In response Machin claimed the effect of the “chilling decision” would be felt in “towns and cities up and down the country”.

So does Machin have a point? What is the planning situation?

“Bringing forward new build retail development in the current climate is not easy,” says Nicola Gooch, planning partner at Irwin Mitchell. “The resourcing issues facing local planning authorities are well documented, and cause delays in progressing applications, and the planning policy picture for retail is fragmented at best.”

Over the past decade, the government has prioritised housing. Significant reform for the retail development sector came into force in 2021, with changes to the Use Classes Order, which introduced a new ‘Class E’ use and “makes it much easier to move other commercial buildings such as offices into retail use,” Gooch explains. But it does not cover physical works to a property.

Retail policies in the National Planning Policy Framework relating to new build schemes, have not been updated to include Class E. That means converting a property to retail is relatively straightforward, but developing a new retail property involves countless hurdles.

M&S’s failed two-year effort “illustrates the complexity of the issues surrounding the repurposing of older commercial buildings” says Melanie Leech, CEO of the British Property Federation.

The sector supports a ‘retrofit first’ approach, Leech says. There are countless examples across the UK “but there must also be support for sustainable redevelopment if it can be demonstrated this will deliver a more carbon-efficient building over the long-term and more socio-economic value”.

Demolition emissions

Machin claimed the new flagship store would have used less than a quarter of the energy of the existing structure, reduced water consumption by over half, and delivered a ‘carbon payback’ within 11 years of construction. That may be so, but Save Britain’s Heritage says demolition would “unnecessarily pump nearly 40,000 tonnes of CO2 into the atmosphere” and was “incompatible” with the government’s emissions reduction targets.

The case will undoubtedly “add fuel to the refit or rebuild debate” says Knight Frank associate Emma Barnstable, and make “any case for demolition increasingly difficult to justify”.

At the same time, adds Leech, “it is vital we make town centres and high streets an investable proposition again, removing some of the barriers such as planning uncertainty”.

In the context of Oxford Street, Machin argues that 42 of its 269 shops lie vacant. Central London is becoming the world’s American Candy store capital.

But many are unconvinced. “This was never about M&S’s altruism around Oxford Street,” says Basil Demeroutis, managing partner at real estate investment firm Fore Partnership. “With less than 20% of the building set for retail, this was a classic smash-and-grab property deal that was set to net M&S a cool £100m. Not all buildings can be saved, forever. But the burden of proof to allow for demolishing buildings needs to be significantly higher than it has been. I don’t think that burden has been met here.”

Former Ocado FD Vineta Bajaj, now CFO of Rohlik Group, agrees. “Machin fails to acknowledge that a number of neutral experts acknowledged that the best thing for the climate is to retrofit and is trying to make this political,” she says. “It’s passionate but M&S need to act in the interest of planet, not profit”.