Following today’s news (Friday 10th August) that Sports Direct has purchased House of Fraser for £90m, GlobalData is urging Mike Ashley, Sports Direct’s billionaire owner,to transform House of Fraser to make it a success.
In a deal that has temporarily secured 17,000 jobs, Sports Direct confirmed it had bought all of the UK stores, brand and stock of House of Fraser, shortly after it fell into administration this morning. Mike Ashley said his ambition is to turn the chain into “the Harrods of the high street” and pledged to keep as many stores open as possible.
Sofie Willmott, Senior Retail Analyst at GlobalData said,“to give House of Fraser the best chance of survival, Sports Direct and its owner Mike Ashley must make drastic changes to both its product proposition and store environment to entice shoppers back. This will require significant investment – something which the chain has been starved of in recent years.
‘‘Mike Ashley could harness his mixed portfolio of retail businesses to transform House of Fraser, combining his more premium fascias Agent Provocateur and Flannels, which sells brands like Burberry London, Fendi and Sophia Webster, to create a more upmarket department store. Although very few of House of Fraser’s own brands remain, those such as Issa and Biba could be incorporated into this new format.
''Given the success of luxury department stores like Selfridges and Harrods, Ashley may attempt to replicate their model using House of Fraser’s locations, however it is questionable whether the high end price points would appeal nationwide, particularly given that London-based department store retailers have benefited from tourism.”
Paul Souber, Co-Head of Colliers International’s Retail division added, “with the latest news that Mike Ashley has just purchased House of Fraser today, on the one hand, this could be viewed as positive news for high streets nationwide as despite the doom and gloom sentiment surrounding the sector at present, this is really a boost in confidence for both landlords and retailers as well as employees in the trade, who were due to potentially lose their jobs.
“In addition, it will be interesting to see how Sport’s Direct’s multichannel experience could help to turn around House of Fraser’s department stores’ ill-fate. As we are all well aware, retailers and landlords are facing the most challenging environment since the post global financial crisis of 2008, driven by changing consumer trends, higher inflation, lower consumer spend and changing shopping habits. Over the past year, there’s been a raft of store closures, administrations and CVAs being announced, which in part, has been blamed on the increasing online and social media retail space. Retailers that provide the right experience and service are really adapting the way that people shop, and as a result, are changing the requirement for the bricks and mortar store so it would be interesting to understand Sports Directs’ take on this and whether they really relish the challenge and are able to adapt House of Fraser’s customer experience through online, physical and social sales, in order to keep apace and meet the consumers requirements of today perhaps utilising in part the Flannels facia.”
Image: Elliot Brown