Hammond helps push Sook's CB2 platform into top gear
A new proptech platform launched in Cambridge could help solve the retail crisis in the UK – and has received a massive boost following an endorsement from the former chancellor Philip Hammond.
“It’s obvious we’re going to have to change quite radically the way the high street works and being able to multi-task physical space seems to me to make perfect sense,” said Mr Hammond after hearing the pitch from Sook, the organisation which has developed the 'Airbnb for shops' retail platform. “The high street is going to shrink. There are going to be – there must be – fewer units, and the idea that you could subdivide a unit in the sense of using different periods of time for different purposes sounds for me a winning idea.”
“It’s a bit like buying a seat on an aircraft,” Sook’s founder, John Hoyle, told the MP in response to a question about the pricing model.
Sook’s first retail space in Cambridge is at CB2, the Norfolk Street café which was the first internet café in the UK. The new owner took over the lease in May, and is currently preparing the premises for a full launch next month, at which point the cafe will be open and Sook’s multi-format retail facility will be available for bookings from business and the general public.
“The two spaces will operate in a complementary fashion,” explained John during a visit to the café. “Lots of people are already rotating this space. We had the Flit crowdfunding event on Monday here, with a full catering service.
“We’ve already had our first festival – the Future Voodoo Festival. We had SoFar Sounds, a Californian-based team, who connect spaces with musicians for a free gig. We’ve had 65 per cent occupancy over the last three months – it’s been unbelievably popular, though we’ve dialled it down now for the refurbishment.”
The Sook premises – next door but with a doorway from CB2 – remains open in the morning for personal trainer Tom Keats’ fitness sessions, and has already been used for drawing classes, a hen do, a vintage clothing business, the Toy Box Club, meditation sessions and as a multi-media art gallery. There’s no doubt the innovation has benefitted from perfect timing. The high street has become a perilous environment for retailers in the UK. M&S, House of Fraser and Mothercare have all shown signs of struggling. Even John Lewis has turned in its worst results for a decade, as profits plunged 45 per cent. The British Retail Consortium says its members shed 70,000 jobs in the last quarter of 2018. Toy R Us has collapsed, Maplin has gone into adminstration and New Look is set to close 10 per cent of its 600 stores.
“It’s the biggest high street crisis since the war,” says John, “so at this moment people really really need our solution.
“There are around 50,000 empty shops in the UK, with 14 more closing every day, and who knows what will happen next year. It’s scary times for retail. Globalisation, automation and the rise of the internet are the reasons why the high street is failing, and this affected assets like CB2.
“I took on the lease to solve as many problems of empty units in shopping centres around the country as possible. Sook solves a problem: retail is a great example of a sector that should be flourishing and I hope some of our solutions will do that.”
John’s father-in-law ran CB2 and he could see some of the problems close-up. Sook was incorporated in March when John, who lives in Harston, was on a business accelerator programme in Shoreditch. Sook has had support from Zinc.vc, a business builder whose programme “brings together 50 bright minds for nine months to find their co-founders and build new commercial businesses from scratch”. Sook has eight staff and expects 20 by mid-September.
“We hope to be operating 20 sites by this time next year – and that’s our proof-of-concept stage,” says John.
Other interested parties include The Grafton owner Legal & General. Its table tennis premises – which John calls “a rates mitigation strategy” – may become the second Sook.
“They’re in negotiations with us to pre-lease the space in the ping-pong parlour to a satisfactory threshold so we can become a Sook there,” John notes.
“What we want next is to get that support from local independent retailers. This is the first serviced retail platform – it’s like a WeWork or AirBnb for shops. People want the space, it’s affordable and it creates money for the landlord.”
The message to Cambridge’s independent retailers, business and other organisations is clear: come along, get involved. It’s £10 an hour. Using a Sook space means you don’t have to pay for retail’s dead days – Monday and Tuesday. There's no rates, just the flat hourly fee.
The other development is that Sook is one of 10 shortlisted companies in the Connected London Retail competition run by Transport for London, which “challenges businesses to come up with an innovative and technological concept that reimagines physical retail space while meeting the needs of our customers, and pushes the boundaries of retail”.
“With Legal & General and Philip Hammond, it’s changed things,” John says. “We’ve had every investor in town talking to us. We’re a technology platform, not a leasing business – the owner is the one who gets the primary slice of the rent.”
The next step is getting the food service at CB2 up and running.
“CB2 will operate as a café in September and the concept is entirely based around sustainability, with organic food and sustainable produce.
“It’s a springboard and enabling platform for Sook next door. We hope to attract all those who used the space before, so the downstairs will still be available for music. You can have a coffee at CB2 and look around Sook...”
Wellness in the morning, shopping in the afternoon, music or other events in the evening, with full details of the bookings available to both organisers and the public... what happens next is going to be very interesting.