AS consumers, we often react emotionally when a well-known retail business has run out of road.

The demise of seemingly indomitable retailers such as Woolworths, Debenhams, British Home Stores and Watt Brothers has been among the sadder episodes as the story of the high street has unfolded in recent decades, leaving behind them memories of when Scotland’s town centres thrived, and retail giants dominated the landscape.

A similar response was elicited last month when it emerged that the owner of East Kilbride Shopping Centre had fallen into administration.

Sapphire, owner of Scotland’s largest undercover shopping destination, appointed administrators at Interpath Advisory after falling victim to the profound challenges currently facing the retail sector.

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The centre, which includes 150 shops, several restaurants, an Odeon cinema and an ice-rink, remains open and its tenants continue to trade while administrators prepare the ground for an attempt to find a new owner for the property.

A spokesperson for joint administrators Blair Nimmo and Alistair McAlinden told The Herald yesterday: “We have engaged Scoop Asset Management and a professional design team to look at long-term redevelopment plans for the centre and will be working closely with the local authority in relation to the feasibility of options proposed.

“In the meantime, it’s very much business as usual in the centre as we reach that busy Christmas trading period.”

That such a prominent retail destination is facing an uncertain future will be concerning for the many people whose livelihoods depend on it remaining open.

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Indeed, it would be difficult to overstate how important the centre is to the town of East Kilbride, which in years gone by would have seen an influx of shoppers from well beyond its borders when the Plaza and the Olympia (key elements of today’s East Kilbride centre) were cultivating their reputations. East Kilbride was one of the first town centre shopping malls in Scotland to embrace the cinema multiplex trend.

While the East Kilbride Shopping Centre would have been one of the biggest beneficiaries when the move to the custom-built malls began to emerge, it now appears that it is being left behind, as footfall drifts to a newer generation of malls.

Just as traditional urban centres in Ayr, Paisley and indeed Glasgow have been eroded by the emergence of the out-of-town destinations such as Braehead, Silverburn and The Fort, East Kilbride also appears to have suffered as major retailers and consumers have begun to favour those newer venues. The collapse of Debenhams, once a major pull to East Kilbride, also left a void that has still to be filled. That shoppers continue to be charged to park their cars at peak times at East Kilbride is also regarded as a barrier for many shoppers, who know they can park for free at other destinations such as Silverburn.

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Of course, the reason why East Kilbride has suffered in recent years is not solely down to its facilities no longer seeming as sparkly as they once did (or because of the car parking charges).The entire retail scene has been hit hard by the pandemic, rendering high streets and shopping centres pockmarked by endless empty units. Footfall and general town and city-centre vibrancy have been slow to bounce back and have yet to recover to the levels seen before Covid arrived.

From the perspective of property landlords, empty shops mean less income from rent which in turn puts pressure on cash flow, as we have seen from another high-profile insolvency event. Shortly before the owner of East Kilbride Shopping Centre went into administration, a similar fate befell the companies behind the Bon Accord shopping centre in Aberdeen, a fixture in the Granite City since 1990. The Guernsey-based owners of the Bon Accord, Aberdeen Retail 1 Limited and Aberdeen Retail 2 Limited, appointed James Fennessey, Blair Milne, Colin Haig and Matthew Richards, partners of accountancy firm Azets, as joint administrators, who cited “unsustainable cash-flow problems stemming from the ongoing impact of the Covid pandemic, rising operational costs and intense retail competition”.

Efforts are continuing to find a new owner for the 460,000 square feet centre, which is understood to have attracted an average of 15 million visitors a year before the pandemic struck. Hopefully, investors willing to take a long-term view will be found to take over both the Bon Accord and East Kilbride. But finding buyers will be a difficult task.

The rise in interest rates which has come as the Bank of England has sought to tame surging inflation has made the cost of borrowing to fund such investments more expensive. One commercial property source told The Herald that higher borrowing costs have made investing in older shopping centres unviable, particularly as some of these destinations require major investment to upgrade infrastructure and for new services to broaden their appeal.

The newer malls tend to offer bigger units, allowing retailers to offer a more sophisticated experience to consumers, and complement shops with a broader range of leisure experiences.

As such, the expense involved in reviving older malls may mean that traditional investors in shopping centres such as pension funds may decide it is just not worth it, although in Glasgow there is evidence of bold action being taken. Land Securities generated plenty of headlines at the start of the year when it unveiled plans to knock down the relatively new Buchanan Galleries and replace it with a new development including homes, a hotel, offices and hospitality outlets, as well as shops.

“Who buys the likes of East Kilbride will be determined by their pricing,” the insider said. “They are not attractive investments. The reason EK went into administration is the rents simply don’t cover the holding costs. These are not going to fall, so someone is going to have to take a huge hit. Planners as well as investors need to think radically (much as the Buchanan Galleries’ owners are) but under the current planning system any fix will not be quick or inexpensive.”