As Debenhams tumbles into administration for the second time in a year and Fenwick makes sweeping leadership changes, Retail Week asks industry experts for their view on whether department stores can survive the coronavirus crisis.

Peter Williams

Peter Williams, former chief executive, Selfridges

“Some will survive, but not all.

“The department store sector was already under huge pressure before coronavirus arrived.

“The switch to online during a period of virtually zero sales growth was putting chains such as Debenhams and House of Fraser under enormous financial strain. Coronavirus only compounds the problem and accelerates the inevitable outcome. If they weren’t bust before, they are now. In the USA, it’s even worse.

“But it doesn’t have to be terminal. Provide a much more focused offering in terms of product categories – beauty, fashion, gifts, proper coffee shops and bars, and nothing else. If you are John Lewis, you are permitted to sell home products. Be present in fewer physical locations with an online offering that, as a minimum, includes all the product lines available in the physical stores.

“Separate from these comments are the flagship stores in the megacities – Selfridges and Harrods in London, Galaries Lafayette in Paris, to name a few. These wonderful emporiums have huge footfall and enormous choice in a fabulous setting, where people want to spend time, meet and mingle.

“However, even they will not be completely immune. Some consumers will take time to regain their confidence in going out to shop, tourist traffic will also take time to recover and the challenge from online will persist.

Department stores have a role but their overall importance is undoubtedly reduced.”

Kate Hardcastle 2

Kate Hardcastle, founding partner, Insight with Passion

“The disruption to the retail world over the last decade has been significant enough, but the current pandemic, its expected impact and speed of change will be like ‘microwaving’ years of further evolution into weeks.

“Consumers are evaluating their purchases and their need for non-essential items in microscopic detail. Online continues to prove its convenience and has served as a lifeline to many in the lockdown. If the customer continues to confidently navigate their own search for goods, what now for our department stores?

“The luxury side, represented by retailers like Selfridges, will continue to excel in experience, invest in new brands and evolve the food and beverage offer, capitalising on consumers ready to socialise once again.

“Primark and the value operators will have relevance with a price-led offer and consumer delight in their speed of delivering affordable trends to market.

“Considering what consumers will want post-crisis, the strategic struggles of middle-market brands like Debenhams and House of Fraser, and their lack of clarity and USP, seem more exposed than ever.

“Their future opportunity is blighted by too little investment and love in the past. John Lewis’ future strategy is critical and should focus on putting its consumers and communities at its heart.”

Leigh Sparks 1

Leigh Sparks, professor of retail studies, Stirling University

“The travails of Debenhams were not down to Covid-19 alone, as its difficulties pre-date the lockdown.

“Its long-term problems, though, point to the struggles many department stores have had in recent years. The classic flagship department store still has its attractions, but the rise of specialist retailers, the onset of the internet and the ’sameness’ that pervades many standard department stores have called into question their mode of operation.

“Many consumers have asked what it is that department stores offer that can not be found elsewhere, or that would warrant a visit or a trip. Many department stores cannot answer these questions satisfactorily.

“Large format stores of this form have also suffered from the way in which we tax retailers and the retail sector. The costs of operation have become disproportionate to the sales and to other retail forms, calling into question the sustainability of the model. Even if this could be rectified – and it might be in some part through the macro response to the crisis – such stores would still have to find the offer to attract the customer.

“This might, in turn, require a move back to some of the origins of the store format. Department stores were dramatic and special retail showcases, that had some link to the local area as well as the national and international supply of products. The sense of ‘special place’ was what made such stores – in many cases, we have lost that in our department stores.

“If that can be brought back after this crisis then perhaps we will see such stores regain a position at the heart of places.”

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