So House of Fraser has been rescued at the eleventh hour by Sports Direct boss, Mike Ashley. Already owning 11% in House of Fraser, and 29.7% in Debenhams, it looks like Mr Ashley is setting himself up to seriously move into the department store sector.
Until earlier today, it did look like we had yet another major retail casualty about to disappear from the High street, with potentially the loss of 16,000 jobs ( 5900 direct employees and 10,100 jobs in concessions)
Earlier today, one of my VIP club members asked me for my thoughts on the whole rescue deal…
There is no doubt that Mike Ashley is a shrewd and clever businessman. He has built up Sports Direct into a credible retailers – tackling both the sports market and the discount sector. He has bought brands such as Slazenger, Donnay, Firetrap… which has devalued them and reduced their “street cred” but has turned them into cheap, volume sports/casual brands, brand slapping the logo onto an array of garments.
But how can Ashley now turn around House of Fraser into a flagship retailer that all towns and cities want in their high streets? First of all his team will review and analyse who the House of Fraser shopper is. How old is she? What is she looking for? Where else is she shopping? This will help them identify if the ranges and brands match the customer, or are the two not currently marrying up at all ( as I suspect is the current situation). The teams will compare House of Fraser to it’s key competitors; Debenhams, M&S, Selfridges etc… what are they doing that is better, different, cleaner, fresher, newer?
Completing the above two exercises are the core route to resolving the problems, the previous team didn’t seem to know where House of Fraser fit into the high street, who their core customer was, or what they wanted… similarly to BHS, they had drifted and coasted along, rested on their laurels and not innovated or evolved. The retail market is changing so fast, retailers have to keep their eyes open, and their heads up… looking at new ways to attract their customers attention, taking great care that their customer stays loyal, but that they too grow and evolve with their customers.
I’m concerned over what Ashley will do to some of the sites… will the prestigious and quite regal looking House of Fraser stores in Bath and Edinburgh soon be ruined and full of cheap fixtures, broken lifts and store fittings that never get repaired? ( as are some of the older Sports Direct stores, or the once wonderful Lillywhites store at Piccadilly circus – now an SDI) … Ashley isn’t one to spend a fortune on store refits, he’s more of a “earn your keep then we’ll invest in a refit” kind of trader.
Will he strip down some of the House of Fraser brands, and stuff the stores with Firetrap, Donnay and Karrimor? I hope not. I sincerely hope he uses this as a fantastic opportunity to revive the rather stale department store retail environment, showing the rest of the stock exchange just how much of retail wizard he is.
So we sit and wait to see what happens next.
And while the work goes on behind the scenes, as small retailers, we use yet another failure as a case study to learn from… don’t fall foul to losing your way. Keep a keen eye on who your ideal customer is, what do they want, and why they are buying from you. Be nimble, change things is they aren’t working, don’t get set in your ways. As our own boss, we can do this, we do have this advantage over our bigger competitors, so don’t be another statistic, an empty shop unit… stay focused.
To work with me on a daily basis, why not join my VIP membership club. It’s an online community and learning space for small retail businesses, and at just £10 per month it’s fantastic value for money, and a great investment in your business. Take a look here for more information https://www.rbqconsultancy.co.uk/the-vip-retail-biz-club/