House of Fraser unveiled its five-year vision yesterday, with management outlining how it intends to deliver a business fit for 2022’s retail landscape.
When Chinese conglomerate SanPower, owned by self-made billionaire Yuan Yafei, snapped up House of Fraser in 2014, retail watchers expected big things.
And it got off to a good start. The department store that had been loss-making from 2006 made its first pre-tax profit in a decade in 2015/16.
“Around 30 to 40 third party young fashion brands will be given the boot, with more focus given to labels such as Jigsaw and Whistles”
However, the year was characterised by the loss of many senior staff, including highly regarded chief customer officer Andy Harding and chief executive Nigel Oddy, who is due to leave the business next month.
Oddy’s resignation forced HoF to bring forward the revelation of a new five-year plan at the tail end of last year and the industry.
At the time, chairman Frank Slevin said the strategy would focus on the store experience and Retail Week wrote, “you have to hope there’s more up HoF’s sleeves than experiential retail”.
But looking at the plan in its entirety, there’s not much meat on the bones.
Serving its core customer
HoF has looked carefully at its core customer, using Experian data. It surmised that she is a mother with two children, a family income two to three times the national average and degree-educated.
“Jo, as we call her, is purpose-driven and cares about her children,” chief customer officer David Walmsley said. “Her children are perhaps older and she has a bit more time to herself and is open to new things.”
HoF is trying to bring Jo the brands that she wants, which means it is swinging an axe at many of its existing labels, both house and third party.
Around 30 to 40 third party young fashion brands will be given the boot, with more focus given to labels such as Jigsaw and Whistles, which will be rolled out to more stores, and Barbour and Mint Velvet, which will be given more floor space.
“A renewed focus on the customer and ensuring that its expensive store estate fulfils its potential is a valid approach”
Four of its nine house brands – Dickens & Jones, Episode, Grey & Willow and Therapy – all on the block.
The remaining brands – Biba, Label Lab, Linea and Maison de Nimes – will be lavished with more attention as a result and another house brand will be unveiled in August.
Buying and design executive director Maria Hollins, who joined HoF from Asos last year, is responsible for developing house brand strategy.
“We want fewer but better house brands and some of them were small in terms of size of range and turnover,” she said. “There was an element of duplication too.
“We have focused on getting a clear product handwriting, maintaining fit across the ranges, and done a lot of work on price to make sure it is competitive, but we’re not compromising on quality.”
Another branch of HoF’s strategy is the aforementioned experiential retail: champagne bars, yoga studios and wellbeing centres are being developed alongside new restaurants in a bid to encourage women like Jo to spend more time in store.
Investing in experiential is of course key to making department stores a desirable place to spend time and ensuring that the internet cannot replace its role - but it is nothing new.
A look around competitor John Lewis’ Leeds store – its most experiential yet with a spa, hairdresser and a coffee-making experience – shows that this aspect of HoF’s five-year strategy is already here.
House of Fraser is doing all the right things here.
A renewed focus on the customer and ensuring that its expensive store estate fulfils its potential is a valid approach.
But as we enter a new age of retail in which the pace of change is thick and fast, this is considered the necessary base level.
House of Fraser’s five-year vision is just another iteration on the current department store market. It needs a more ambitious spirit if it is to thrive in the future.