Upscale department store group Harvey Nichols will launch a young-fashion offer early next year as part of chief executive Joseph Wan’s strategy to beat the downturn.
The retailer will convert the fourth floor of its flagship Knightsbridge store in London, which at present carries products such as gifts, to young fashion beginning in August this year. The floor is expected to open in January or February 2010, Wan told the World Retail Congress in Barcelona.
Harvey Nichols has traditionally targeted affluent shoppers aged between 25 and 45. The decision to target younger shoppers in the 15- to 21-year-old age bracket – who have never experienced previous recessions and are unikely to rein in spending – forms part of Wan’s three-pronged strategy, comprising adaptation, positivity and adaptation, to boost business during the downturn.
He said his decision to publicise details of Harvey Nichols’ profits fall in its last financial year represented positive action, because it provided clarity and allowed staff to focus on improving performance. “The purpose of the headlines was to get the bad news out of the way and trade forward with confidence and optimism,” he said.
He said that a keen focus on inventory was an example of discipline, and marketing to foreign tourists – another departure from the retailer’s traditional practice – was another example of adaptation.
Wan said that regardless of the length and depth of recession he was “quietly confident” that Harvey Nichols could look forward to renewed profit growth.
Fellow speaker Richard Simonin, chief executive of Etam, said he responded to recessionary conditions by concentrating on getting retail basics right, focusing on new concepts that enhance shopper appeal such as the Undiz lingerie offer, and introducing a new communications strategy.
Patrick Chalhoub, co-chief executive of Middle Eastern group Chalhoub, said that region was proving “relatively resilient” despite an impact on some product categories and press coverage about the effect of the downturn on previously booming markets. He said that economic growth is now forecast to be 2 per cent this year, revised up from -1.4 per cent a few months ago.
Kesa finance director Simon Herrick said retailers had to “care absolutely” for customers to avoid losing them and that motivating staff – “the best advert” a retailer has – was vital in the downturn.
He said his focus is on cash margin per product sold and advised retailers to talk early and openly to their banks about their financial position. He said that, despite facing criticism for not returning cash to shareholders following a disposal, that decision had proved correct because it enabled Kesa to refinance before the banking market collapse in September 2008.