The secret to saving Jenners and Scotland's grand old department stores

Many aspects of traditional retailing are in decline, not least the department store which is fast-becoming a footnote to another era. While big names such as Jenners, Frasers, BHS and Debenhams once occupied the prime positions in city centre shopping streets, most of these have now fallen by the wayside, victims of changing consumer trends. 

The grand, city centre buildings or spacious units within shopping malls in which these large retailers typically operated are now more likely to be taken over by high-end supermarkets, discount fashion brands or, in many cases, simply left empty. 

This has created a problem across Scotland’s cities as most of these former department store sites are generally difficult to let as they are too old, too big, and too expensive to maintain for other retailers. With owners of these retail assets under growing pressure from funders and shareholders to maximise returns on their buildings, a potential new saviour has emerged: the hotel sector. 

Jenners - The iconic building is currently being repurposed with construction underway on a 90-bedroom boutique hotel across its upper floors, along with a café, bars and restaurants on its lower level. | Jane Barlow / PA

Scotland’s burgeoning tourism sector, where the country has seen a 23% increase in visitors compared to 2022, has created a surging demand in hotel accommodation. This has brought with it a sustainable solution in terms of what should be done with former city centre department store sites, which are increasingly being transformed into new, often luxury, hotels.  

The former Jenners site in Edinburgh is one such example. The iconic building is currently being repurposed with construction underway on a 90-bedroom boutique hotel across its upper floors, along with a café, bars and restaurants on its lower level. Meanwhile, the former Debenhams store, which occupies a significant area of the city’s Princes Street, is set to become the home of Scotland’s first Zedwell Hotel. The luxury brand promises to offer a ‘unique, sleep-centric experience’ to its guests in its new premises within the nine-floor building.

This trend of converting former department stores extends to Scotland’s largest city. Owners of the former Watt Brothers premises on Glasgow’s Sauchiehall Street are hoping to reach a deal with the city’s local authority to develop a new hotel on the site despite having an initial planning application rejected in 2022. 

Darina Kerr is a partner and real estate specialist at law firm CMS | CMS

Candleriggs Square in Glasgow city centre has also seen the conversion of the ex-Goldbergs site which, along with several hundred new homes and co-working spaces, also includes Scotland’s ‘largest hotel by room numbers,’ the 494-room Social Hub Glasgow.

These and other planned developments are a welcome trend as they inject investment into what were often previously unviable property assets. They are also helping revitalise the centres of Scotland’s two largest cities, where there is a strong demand for hotel accommodation. 

Vacant space for new build hotel developments is extremely scarce, so converting existing buildings such as redundant department stores is an attractive option. These often iconic sites also offer character and heritage features, including large windows which allow natural light to further enhance the guest experience, all of which makes them attractive to luxury hotel brands. 

Among the many advantages they offer, converting these older listed buildings also creates a number of significant challenges for developers. These include the need for detailed feasibility appraisals to precisely assess the long-term viability of such buildings. 

Debenhams in Princes Street has stood empty for three years. Plans for a 210-bedroom upmarket hotel fell through last year, but the store is now due to be converted into a first hotel in Scotland for luxury brand Zedwell. | Lisa Ferguson

Developers must also carefully consider the age and structure of the building which is being proposed for conversion, as many former department stores tended to have an open plan design, which is not usually appropriate for a hotel layout. This could therefore require installation of partition walls and modular units to create the high number of rooms which can be critical to a hotel’s commercial success.  

Adapting a former department store’s core central services such as lifts, plumbing, ducts, bathrooms, plant and equipment is another key consideration, especially within an older, and possibly listed, building. There can also be limited scope to move exterior walls, so the creation of balconies or other outside leisure and hospitality spaces can be more restricted in traditional sites.

While welcoming recent and ongoing department store conversions in our two biggest cities, we need to also focus attention on how this can benefit other regions of Scotland. If we can further develop this trend across other regions, this could play a key role in driving economic development and spreading tourism out to other communities which can help reduce the strain sometimes felt in oversaturated destinations, especially Edinburgh. 

Jenners, Princes Street, Edinburgh, building lit up at night. | PA

The simple market-led approach which is currently working in Glasgow and Edinburgh may need to be supported by public and private collaborations to progress new hotel developments in other areas of Scotland, including places like Perth, which could significantly benefit from a higher standard of hotel accommodation. 

Within these more outlying markets, there is a great opportunity for local authorities and other public sector bodies to embrace the tourism and placemaking benefits that come from investment into new hotels by working in partnership with private sector developers.  This type of collaboration would be beneficial particularly in more remote locations where hotel developers often require added incentives. 

While converting old department stores into hotels is a complex process, the potential rewards are significant, both financially and in helping create new vibrancy in urban areas. 

Current evidence shows us that developers within Edinburgh and Glasgow, both of which are key tourist locations, are forging ahead. We can drive further economic growth by replicating this trend in other parts of Scotland through bringing together investors, developers and the public bodies responsible for planning and other forms of regulation. 

Darina Kerr is a partner and real estate specialist at law firm CMS