Labour needs to move faster to improve high streets if it wants to win back hearts and voters

T here’s a reason why Nigel Farage likes to talk about high streets in his video walkabouts, where he snipes about vape shops, barbers and parking. It turns out people who live near empty shops are more likely to vote for populist parties, according to research by University of Warwick professor Thiemo Fetzer.

Before the local elections, polls showed 62% of voters planning to back Reform believed their local area was in decline, according to YouGov and Faster Horses polling. The electoral earthquake has since thrown councils into disarray – Birmingham has been described as an ‘ungovernable mess’ with six parties and no overall control.

Meanwhile the perpetually disenchanted British public seems to be voting for political upheaval on an ever-faster cycle. But why are high streets such a powerful trigger?

As a front door to the neighborhood, they drive straight to the heart of how we feel about ourselves and our lives. Too many empty shops is an embarrassment; a disgrace. Would you show your high street off to a visitor? Go there on a Sunday out? With up to 1 in 4 shops lying vacant in town centres from Brixton to Bradford, that’s increasingly unlikely.

Perception is not reality: High streets no longer reflect the state of local places. Roughly half of retail properties are owned by property companies and investors, with overseas investors owning almost 1 in 5 shops, according to research by Estates Gazette. That shop on the corner is increasingly a portfolio decision; a line on a spreadsheet that has little to do with the viability of a butcher or baker.

While there’s no doubt an increase in business rates, minimum wage and National Insurance payments have squeezed some shopkeepers beyond survival, invisible forces are also at play. 

 

 

Consider the town of Newton Aycliffe, where a single investor owns the entire high street, Daejan Holdings. The company has refused to answer The Guardian’s questions about why 23 of its 45 shops stand empty. The high street makes an annual loss, but Newton Aycliffe accounts for just 0.12% of the company’s global holdings.

On a larger scale, private equity firms are triggering vacancies across the country when they liquidate high street stalwarts. Debenhams, Topshop, Toys “R” Us, Maplin, HMV and Poundworld all filed for bankruptcy in the years after private equity takeovers.

It’s a global issue. In the US, Senator Elizabeth Warren has been raising awareness about private equity firms, proposing the Stop Wall Street Looting Act to hold them accountable for the asset stripping and bankruptcy costs leveraged on companies under their control.

Research in the US showed that private equity-owned retailers are twice as likely to go bankrupt. This fuels the narrative of the failing high street – which plays right into their hands.

According to the emerging playbook, firms buy up major retailer taking out loans to do so – what’s called a leveraged buyout. The debt is then transferred to the retailer. The equity firm then sets about extracting what profit they can, cutting jobs, liquidising stock and selling off properties. After all that, the business hobbles along and eventually declares insolvency. The private equity firm claims they tried to rescue the business, deeming it unsalvageable. 

It’s becoming a familiar tune. British private equity firm Modella Capital bought Hobbycraft, Claire’s Accessories, Ted Baker, The Original Factory Shop, WHSmith’s high street division (TGJones) and has an interest in Russell & Bromley. The British firm, founded in 2022, often closes stores within months of taking them over.

Coming under press scrutiny for its opportunistic deals, after Modella restructured Hobbycraft and The Original Factory shop under CVA insolvency processes, the redundancy costs that followed store closures were passed onto the taxpayer.  

 

Modella is now set to close around a third of WH Smith’s high street shops. Some of its practices are questionable: After forcing shopkeepers to change the shop branding to TG Jones, it then charged £2.9m in fees for their right to use the name. 

Modella Capital also ‘rescued’ Claire’s Accessories in the UK and Ireland from bankruptcy after another private equity firm (Ames Watson) declared insolvency in September 2025. It has since put Claire’s into administration again in January 2026, closing all 154 of its stores and making 1,300 redundancies. 

Pundits are scratching their heads as to whether Modella Capital has the skills to turn retailers around. The question we need to ask is whether saving these high street brands was ever the plan. 

 

ASDA and Morrisons’ private equity owners have raised £6.5bn selling off properties. Both companies are struggling with significant debt and high interest payments since being sold to private equity firms in 2021. 

 

There is a silver lining for Claire’s, as Julien Jarjoura, the French jewellery entrepreneur who runs 240 Claire’s stores across Europe, has announced plans to reopen 50 stores in the UK. “I feel so sad when I see such a nice business going down,” Jarjoura told the Guardian.

 

A nice business – because many of these were nice businesses. Perhaps the UK needs a Stop High Street Looting act of its own. What’s certain is that Labour must move faster and more strategically against bad-faith actors and meaningfully effect change on the high street. The results of the general election depend on it. 

 

Progress has been slow. Despite coming into force in 2024, Brixton is the first council to pilot High Street Rental Auctions – an initiative that allows councils to auction off the tenancies of shops that have been empty for over a year, forcing them into use at reduced rents. The pilot is being funded by a grant from the Mayor of London – proof that money is needed to lay the groundwork for cash-strapped councils to consider taking action on vacant shopfronts.

 

Then there’s Pride in Place, which promises up to £20m of funding support to 250 areas across the UK. The funding will be delivered over the next 10 years. Too bad the next general election is in 3 years time…

 

What’s clear is that we are not short of ideas for high street renewal. The latest edition of The Developer magazine is full of inspiring stories of entrepreneurial retailers, BIDs, professionals, councils and communities reinventing “distressed assets” into catalysts for change. If we can spark its transformation, the future of the high street will be bright.

 

First, the focus must be on arresting this process of managed decline. We need to stop the manipulation of these community assets and shift from a mindset of failure and cost-cutting to one of investment, radical transformation and care. A new system of commerce on the high street is emerging, built on community and connection. But it requires some expert midwifery.

 

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This editorial appears in the Summer 2026 edition of The Developer magazine which is on sale now. Why not become an organisation member and help support our work? You’ll get the magazine and tickets to our events.