Displaying items by tag: Frasers

coronavirus speeding up retailers end of lifeRecently, a government advisor, Professor Neil Ferguson, director of the modelling programme at Imperial College London's MRC centre for global infectious disease analysis, estimated that up to two thirds of people who die from coronavirus in the next nine months are likely to have died this year from other causes. He said that many of those deaths were likely to be old and seriously ill people who would have died from other conditions before the end of the year. What COVID-19  is doing, sadly, is speeding up the end of life and it’s the same for brands and retailers. 

Some retailers have started to fall into administration, pointing the finger of blame at the COVID-19 coronavirus. The majority of these brands and retailers were sickly patients to start with. Brands like Beales, Laura Ashley, Carluccio's and BrightHouse were on wobbly ground way before this devastating virus was on the horizon. The coronavirus has just cut short the inevitable. Bournemouth based department store Beales closed earlier than scheduled and left unsecured creditors £17.6m out of pocket.

Left - The Beales flagship store in Bournemouth

Other patients at risk are brands like shopping centre group Intu, struggling under a £4.5bn debt mountain, and who failed to secure new funding before the crisis hit. They’ve also been hit by stores holding back their rent payments recently. Frasers, owner of Jack Wills, has been cutting off vast limbs of its retail network to save their critically ill patient, Cath Kidston is looking for a buyer to save the business and up to 800 jobs and coronavirus speeding up retailers end of life Laura AshleyNew Look has requested a three-month rent holiday from landlords. H&M has threatened landlords with walking away from 300-plus store leases if sales fail to match pre-coronavirus levels once the pandemic passes. How others like Debenhams and the Arcadia come out of this pandemic is anybody’s guess.

Right - Laura Ashley has fallen into administration

The patient metaphor has one big and important point; the third of previously healthy people who could potentially die. This is where the government efforts to help businesses should be focussed. Those businesses who were previously healthy, but, due to unforeseen circumstances, have been thrown into jeopardy should be given the largest help. Whether it’s down to the sector they are in or the way they sell, these previously healthy retailers should be given the ventilator of loans and payment holidays to give them life. 

The longer this crisis goes on the larger that third will become. It is survival of the ones who were the fittest going into all of this.

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Published in Fashion
Tuesday, 08 October 2019 09:22

ChicGeek Comment Pride of Place

Local stores anti clone towns or shopsWe’re often bombarded with marketing speak talking about “local”, but it’s mostly just that, speak. Remember when HSBC used to refer to itself as the “The world’s local bank.”, it meant nothing more than operating in lots of different markets and countries. Local became more about geography than anything else. It joined the group of words, such as luxury, modern and sustainable, that get used all too often, but have become meaningless. 

Trying to balance the idea of a much loved local, independent retailer and the scale of a larger chain is the dream of any contemporary brand or retailer. According to CACI Consulting Group’s ‘Location Dynamics” engine, 75% of the UK high streets have the same brand profile. They say “The concept of clone towns is well known, but we believe clone stores are the real issue.”

Left - Welcome to clone town - Can brands decentralise and empower its people on the ground to make decisions?

It’s boring and in a saturated market many cookie-cutter, anonymous chains are no longer appealing to consumers and as such we’re seeing those with too many stores close or reduce their footprint.

“In a market where consumers are seeking localisation and engage in brands that mirror their values it is essential that a store is part of the community in which it sits.” says Alex McCulloch and John Platt, Directors of CACI Consulting Group.

“Customers can buy generic product sold in a uniform way online, they seek out stores for the personal, curated, local and engagement. Brands that therefore dictate homogenous stock and store fit out regardless of the local customer will not deliver that experience and as a result fall away.” they say. “The brands that trust in their people on the ground, invest in them and empower them to know their shopper as well as supporting them with forensic data analysis on what sells, what doesn’t, which marketing worked etc are the ones that will succeed.”

“Data alone cannot fix the problem, but nor can people. Good brands leverage both. A great example of this is Waterstones, finding a similar one in the fashion sector is a challenge – typically independents lead the way here. One fashion brand that doesn’t shine in this area is M&S, which serve up the same store, stock and fit-out regardless of market, and have only just entrusted their store managers to know their own P&L; the antithesis of employee empowerment.”

The type of store finding it hardest to adjust to modern retail was, originally and ironically, the most localised. Nearly every town and city had their own individually named department store up until quite recently. It was only in the early 2000s that John Lewis, with the exception of Peter Jones and Knight & Lee, which is now closed, rebranded each store to the company umbrella name. Tyrrell & Green in Southampton, Bonds in Norwich, Trewins in Watford, Jessops in Nottingham, Bainbridge’s in Newcastle, Robert Sayle in Cambridge and Cole Brothers in Sheffield all disappeared. They were all recognisably John Lewis because of the store interiors and branding, but retained their historical monikers into the 21st century and the affection that each town would have for them.

DH Evans on Oxford Street was re-branded as House of Fraser in 2001 along with many other well known names such as Rackhams of Birmingham and Kendals of Manchester. (It will be interesting to watch House of Fraser’s next rebrand to Frasers in 2020, back to the original Glasgow store’s name, with a new store in Wolverhampton’s Mander Centre following the exit of Debenhams. “Frasers of Wolverhampton” could have quite the ring to it?)

Local stores anti clone towns or shops Banksy

Up until 2018 the Newcastle based department store chain, Fenwick, had individual buyers for its 9 department stores. In order to save costs they centralised their buying last year saying, ”Fenwick has today announced a proposal to modernise and reorganise the business, moving to a functionally led structure while retaining our local focus.

“These proposals are part of a broader strategy to modernise the business and to invest in both Fenwick’s multichannel offer – including IT upgrades and ecommerce – and its flagship Newcastle store.” Previously each store ran autonomously.

It is understandable the desire to have everything centralised under one name and buying team. It saves costs and doesn’t confuse the customer. It also makes more sense because of the internet and having one unified website, but it loses the personalisation and affection that people had for these brands and nobody wants to think that their town or city is the same as everywhere else. (In out-of-town shopping centres it doesn’t matter quite as much because their isn’t so much ownership of place). 

Right - Do clone towns need a pop-up Banksy store like this one in Croydon?

This reblanding doesn’t take into account British idiosyncrasies or quirks and our love of personality. Many chain stores want bland boxes. The historical nature of the fabric of many of these older brands and their buildings have been looked at as a problem, money pit and not conducive to modern retail rather than embracing their uniqueness. It’s only poor and long term under investment that has let these retailers down. Liberty of London wouldn’t be the same if it was in another building. The building is the brand.

"There is a fear that localised = expensive. It doesn’t need to – you know a Waterstones when you go in it and the branding is universal, but each store manager has autonomy over the look and feel of the product, what is on promotion and maintains local charts etc.” says McCulloch and Platt, Directors of CACI Consulting Group.

"Chains need to trust that their staff on the ground can make decisions on how they sell and give them space to do so within the brand framework. Equally they should be able to use POS data, online sales data and customer data to inform the manager on which lines have worked, which initiatives drove sales and how to better them.”

Engaged employees make better employees especially if they are personally invested in decisions. It’s the opposite of automation and the robotic attitude to manual shop employees.

“By trusting in the people on the front line, educating them, training them and supporting them through data will you also likely see key staff retention increase because staff will be empowered in their roles.” says McCulloch and Platt.

Is the design of stores an issue here and how can design catch up with consumer behaviour? “I’m not sure design is at fault here, there are many truly innovative stores and spaces in the market. The issue is more typically underinvestment in stores and a homogenous approach to stores. A brand can tailor its social ads based on geography and consumer (a 20-year-old single male in London will get served a different ad. to a 28-year-old mother of two in Liverpool) but don’t consider the same approach and nuance with their stores.” says McCulloch and Platt.

Facebook has been putting ‘Beacons’ into stores to send consumers personalised ads and to track their movements. Retailers also need to work backwards from this and tailor the stores to the people who are frequenting them. They could find out this information from peoples’ Bluetooth being turned on and then change the buy of the store according to the breakdown of the consumers and visitors. 

Obviously, not each and every store is identical. Stores are different in size and can accommodate different levels of ranges. Some chains specifier different product for different locations, but, it’s more a mindset and preconception that they’re all the same which is the main problem here. People want to be pleasantly surprised. “I’m-not-going-to-go-in-there-because-I-already-know-what-they-sell-and-I-can’t-be-bothered” is the modern attitude to many chain stores. The more individual or local they were perceived to be, the more often you’re likely to take a look. If you want anonymous and clinical you’ll shop online, it’s about pride of place.

Published in Fashion

Mike Ashley pacman Jack Wills british high street house of fraserYou’re joking, not another one!! - said in a Bristolian accent - when news came in that Sports Direct’s, Mike Ashley had snapped up Jack Wills. Yet another brand to be gobbled up by the Pac-Man of the British high street.

Left - Jack Wills was just gobbled by the high street Pac-Man, Mike Ashley

The preppy retailer had been on the block after private equity owner, BlueGem Capital, lost interest. Things were obviously worse than was thought with Jack Wills being put into administration and immediately sold pre-pack to Sports Direct for £12.75 million. The deal includes all 100 UK and Ireland stores and stock, as well as a distribution centre, but not the international business.

This is just another brand in a long list of troubled retailers snapped up by Ashley in his buying spree over the last few years. While many of these retailers have been snapped up for bargain prices, inspired by his Sports Direct marketing no doubt, they were in trouble for a reason, and, there’s only so many brands you can give the attention and TLC they need to nurse them back to health.

Ashley has also been distracted with his failed bid for Debenhams and his shareholding being wiped out, and in his recent, disastrously handled, release of Sports Direct’s latest set of results he started to lament his purchase of House of Fraser. He’s realised that House of Fraser is a serious money pit. So, why does he want even more? Just because you can, doesn’t mean you should.

Every time a brand gets into trouble, Ashley is named as a potential suitor and it’s almost becoming a joke. It’s as though he’s some magic man that knows something we don’t and while we’ve been waiting, with some scepticism, on some of the ‘Harrods of the high street’ rhetoric to be followed through on, he needs to hurry up before it all becomes too late to repair.

Social media has become a running commentary of people saying how bad their local House of Fraser has become and how it is slowing turning into another branch of Sports Direct with its Lonsdale pants and Slazenger joggers.

Maybe a sign of intention, he paid £95 million - more than for the entire chain - for the freehold of the original House of Fraser in Glasgow promising to turn it into the ‘Harrods of the north’. (Harrods must be loving all this free publicity btw). There are plans to create a mini, higher end chain of stores - around 7, including Glasgow - within the House of Fraser group, called ‘Frasers’ with the remaining stores stocking more mainstream options.

Ashley said in the recent set of results, “On a scale out of 5, with 1 being very bad and 5 being very good, House of Fraser is a 1, albeit we are trying very hard to turn the business around this will not be quick and it will not be easy. Even though we do believe there could be a bright future for House of Fraser, and indeed have publicised our Frasers vision which we are very excited about, if we had the gift of hindsight we might have made a different decision in August 2018.

“We have continued to look under the bonnet as we integrate the business, we have found that the problems are nothing short of terminal in nature,” he said. “We are continuing to review the longer-term portfolio and would expect the number of retained stores to reduce in the next 12 months.”

He needs to start with the Glasgow store, which is already one of its premium branches, and show the industry and consumers what the plans for the roll out are.

As well as House of Fraser and Evans Cycles, he added online retailer, sofa.com, this year, and then said the overall retail industry is in “dire straits”.

Mike Ashley pacman Jack Wills british high street house of fraserIf this wasn’t a big enough headache, the Belgian tax authorities has just sent a payment demand for a whopping £605 million. Sports Direct has entered into a mediation process and the demand relates to the tax treatment of goods being moved intra-group throughout the EU via Belgium. Even if reduced, it’s likely to be a huge bill regardless.

As for the core Sports Direct business, profits slipped by 4.7% to £264.7 million according to the latest financial figures. The company said it will not be issuing any profit guidance for next year, but some guidance may be issued with the company’s half-year results.

They also said, “We remain very focused on delivering our elevated proposition. We will see some great milestones achieved in the year ahead, with the Flannels flagship store opening and we will commence the work to shape the Frasers Glasgow store into what we believe will be a fantastic shopping experience for our customers and showcase our intentions for the remaining portfolio of stores.”

Flannels is the bright spark within the group and the most believable part when it talks of ‘elevation’. Selling premium brands such as Valentino and Gucci and expanding rapidly, it would fit into this vision. As part of the Premium Lifestyle division, which also includes Cruise and van Mildert stores, it has grown from sales of £60.4m in FY17 to £173.9 in FY19.

Right - Inside the 'Harrods of the north' - Glasgow House of Fraser

The company told Drapers, Flannels had an ambition to open 15 to 20 stores per year until it reaches its target of 100. There are currently 43 shops with new openings in Chester, Newcastle, Watford, Sutton and York as well as the huge and much anticipated Oxford Street branch.
Sports Direct Group’s head of elevation Mike Murray said, “We are focusing on key cities that haven’t had exposure to luxury or a well-executed luxury environment. Our stores aren’t the typical size of 2,500 sq ft or 3,000 sq ft. We are focusing on big destination stores so it is worth people’s while coming.”

The new House of Frasers or ‘Frasers’ could just be an enlarged version of this, but there are only so many £800 designer hoodies they’ll be able to sell and will need incorporate more experiential services and novelties. The House of Fraser brand has been damaged and will take a lot of time and money if it’s to compete with the regional Selfridges and Harvey Nichols of the world.

The prediction is the entire brand will be binned and disappear along with the majority of the stores and the new Frasers brand will live on in a handful of larger cities. But, this is still going to take a lot of money.

The Sports Direct Group currently operates 367 stores in England, 37 in Scotland, 28 in Wales and 17 in Northern Ireland, along with 35 other fascias including USC. This represents a net reduction of 9 stores over the period as a result of 13 openings and 22 closures. Despite the net reduction in stores the total sales area has increased to approx. 5.6m sq. ft. so it is very exposed to the current state of the high-street.

Lord Stuart Rose has warned Mike Ashley over his ambitions for a retail ‘oligopoly’, saying, “My view in retail is to stay nimble, lean and mean. You need to be able to turn on a sixpence,” he said.

This shopaholic nature of brand buying and lack of investment in what he already owns is a confusing and dangerous combination. He needs to slim everything down, keep what’s working and be ruthless. (That last bit shouldn’t be a problem). 

We’re all hoping Ashley’s game plan, whatever it is, is successful because he now owns a huge slice of the British high street. FYI - Spud-U-Like is still available… #harrodsofthehighstreet

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