The owners of the Mailbox are set to invest heavily in a major redevelopment to capitalise on the renaissance of Birmingham city centre.
A new roof, larger public areas and improvements to the surrounding infrastructure will be created at the mixed-use development, as part of an investment thought to be worth £50 million from Brockton Capital and partner Milligan Retail, which bought the Mailbox two years ago.
It will see anchor Harvey Nichols double the size of its presence and is part of proposals to improve the retail offer to take advantage of increased footfall in the city centre with the New Street development, new John Lewis and £187 million Library of Birmingham.
Despite the move coming on the back of gloomy retail forecasts this week, Brockton Capital partner Simon Samuels said the investment is evidence of confidence in the city centre’s regeneration, and Harvey Nichols’ backing was the “ultimate endorsement”.
And the Mailbox expects 500 additional jobs to be created when the development is completed in 2015.
Mr Samuels told the Birmingham Post: “We love Birmingham. It is the UK’s second city and we love what Birmingham City Council are doing to promote the city, including some very big infrastructure projects which are attracting additional investment into the city.
“And we love what that means for the Mailbox. The New Street redevelopment is going to be transformational – in fact the evidence is that it has been transformational already.”
The redevelopment is the first major move by Brockton and Milligan since taking over the Mailbox for £127.1million from Birmingham Development Company in April.
Plans have been drawn up by architect Stanton Williams and work is set to begin in the summer and be completed by spring 2015.
A key part will be Harvey Nichols’ move to a new 45,000 sq ft signature store when the development is re-launched.
But the Mailbox’s owners are also keen to capitalise on the improved £600 million New Street Station and plan to invest in public areas outside to encourage greater footflow from the new John Lewis.
They are currently working with Birmingham City Council to introduce a new, improved pedestrian-friendly area around the underpass beneath Suffolk Street Queensway, improving access from Navigation Street and New Street.
The work will mean that Jaeger, LK Bennett and Gieves and Hawkes will close for a period while work takes place and return after.
Harvey Nichols and the Armani store will trade throughout, as will the Toni and Guy and Nicky Clarke salons, all restaurants, bars and the car park.
The new Harvey Nichols store will be positioned in the former post-room space, at the centre of the development, which recently played host to a series of catwalk shows in the Style Birmingham event.
Joseph Wan, group chief executive at Harvey Nichols, said the move came after its menswear and personal shopping operations performed “beyond expectations” in the city.
He said: “We firmly believe our participation in this redevelopment will underline our commitment to Birmingham and its shoppers – it is a testimony to our success in the city as well as the success of the city itself.
“The new store will enable us to greatly expand for our customers the best of fashion, beauty, accessories and food.”
The investment comes on the back of gloomy research from the Centre for Retail Research this week, revealing that UK store numbers will fall by 22 per cent to 220,000 in 2018, causing some 316,000 job losses across the country.
However, Milligan Retail chief executive John Milligan said that there was strong demand for destination shopping, and the Mailbox would be well-placed to benefit from the city’s improved retail offer.
He said: “The idea is people come here and spend half a day. At the moment it’s more of a street scene and we want to get loyal customers coming here and spending time.
“We have done the deal with Harvey Nichols and we have got the design right – the architects have been working for well over a year on the quality of the finish.”
He added: “Birmingham will be the only city outside London to have a Harvey Nichols, Selfridges and John Lewis.
“While they are all different, there is a shared customer and they are all quite close to each other. You would have to jump in a cab between them in London, whereas you can walk it here.”
Mr Milligan, who was previously involved in the deal for Hammerson to take a stake in the Bullring, said a key part of the work was bringing the entrance closer to New Street through further improvements to the underpass.
"Plans are still being worked up for this area, but could include a coffee shop or gym featuring as part of a brighter pedestrian area.
He added: “John Lewis being close to us is brilliant. What has come out of the research is that the people that will be our shoppers, that go for quality brands and luxury, want space and to be away from the hustle and bustle of New Street.
“That is why the Mailbox works.”
Mr Milligan said work starts now on attracting new brands into dozens of stores, with events planned in the city in coming weeks.
Paul Hanegraaf, creative navigator at Milligan, said the space will be dramatically changed through a new “urban room” under the roof.
He said: “The urban room will form the centrepiece of Mailbox’s customer experience, creating a brand new, elegant space. It was very clear from our focus groups that the Birmingham shopper wanted Mailbox to retain its unique and exclusive status and so this very much forms part of our central strategy.”
Sir Albert Bore, leader of Birmingham City Council, said: “The retail offer will be transformed over the next few years and I welcome Harvey Nichols being part of that change, doubling the size of its store in the Mailbox and strengthening its commitment to the city.”