Another nail in the coffin of the British high street, and this time it is the fitting room that gets the boot. The teen fashion brand, whose sudden closure of all its changing cubicles has sent a shudder through the retail sector, claims it is merely adhering to the very safety guidelines the government loves to trumpet as a global gold standard. But let us be clear: this is not about safety. This is about the mounting regulatory burden that is slowly strangling the life out of our shops.
The brand, which we shall not name for legal reasons but whose clientele is young, style-conscious and heavily reliant on social media validation, announced yesterday that it would permanently shutter its fitting rooms across all 87 UK branches. The official line is that updated Retail Safety Guidelines, introduced last year by the Health and Safety Executive, are too costly to implement. Too costly for a company that reported £23 million in pre-tax profit last year? The phrase crying wolf springs to mind.
Let us examine those guidelines. They require fitting rooms to be monitored via CCTV or staff patrols, with strict limits on the number of garments a customer can take in. It sounds reasonable, until you realise the compliance costs: installation of cameras, additional security personnel, and software to manage the queue. For a brand whose margins are already wafer thin, this is the final straw. They have calculated that the return on investment for these safety measures is negative. And shareholders, those poor souls who have already seen the stock drop 18% this year, would not stand for it.
This is the price of regulatory capture. The government patted itself on the back when those guidelines were published, hailing them as the most comprehensive in the world. They are just that: comprehensive, complex and crippling. Yet no one in Whitehall seems to have considered the capital flight this would cause. Investors look at the UK retail landscape and see a minefield of costs. They see Gilt yields rising as the cost of borrowing climbs, and they flee to markets where the red tape is thinner. The result? Less investment, fewer jobs, and fitting rooms that gather dust.
The brand’s CEO, a man whose compensation package last year was a cool £1.2 million, called the move a difficult but necessary one. He spoke of protecting staff from abuse, which is code for shielding the balance sheet. He also mentioned the rise of online shopping, a tired scapegoat that conveniently ignores the fact that many of his customers still prefer to try before they buy. But try they cannot. So they will go elsewhere. Perhaps to Zara, whose fitting rooms remain open thanks to a more pragmatic interpretation of the same guidelines. Or to online giant ASOS, which now offers free returns and a virtual try-on app. The bricks and mortar store has just become a little less attractive.
Make no mistake: this is a bellwether. If a young, hip brand with a loyal customer base cannot make the maths work, what hope for the rest of the high street? The Federation of Small Businesses warns that up to 60% of independent retailers could follow suit, turning their changing rooms into storage closets. The retail sector, already battered by inflation and consumer spending freezes, will now face an additional headwind: the loss of the fitting room experience.
Central bank policy, as ever, is part of the problem. The Bank of England’s hawkish stance on interest rates has made borrowing expensive, and the cost of capital for retrofitting safety measures is prohibitive. Fiscal responsibility, what little there is of it, has not extended to subsidising compliance. The government could have offered tax breaks or grants, but instead it sits on its hands and watches the retail sector wither.
Let us be honest: the global standard for safety guidelines is a myth. Other countries have similar rules but enforce them with a lighter touch. The UK, in its zeal for regulation, has turned a reasonable safety measure into a job-killer. The Teen brand’s fitting room closure is not an anomaly; it is the logical conclusion of a policy that values box-ticking over business.
The irony is that the guidelines were meant to protect customers, especially young women, from harassment. Yet now those same customers are being denied the simple act of trying on a dress. Is that progress? I think not. The market will find its way, as it always does, but the path will be littered with boarded-up fitting rooms and abandoned leases. The bottom line is this: the unintended consequences of well-meaning regulation are sometimes more damaging than the problem they sought to solve.
As for the brand, their stock might get a temporary pop from cost savings, but the long-term damage to their customer experience will erode loyalty. They have saved a few quid today, but lost a generation of shoppers tomorrow. That is not a profitable trade.
