House of Fraser’s decision to shut 31 of its 59 UK stores will have an impact on high streets up and down the UK.
Should its radical company voluntary arrangement (CVA) get the green light from creditors, high-profile stores in Oxford Street and Birmingham will be among those to close their doors.
The strength of the competition in those locations may well have been behind the decision to shut up shop – and will spark a battle between a other retailers including Debenhams, John Lewis and Marks & Spencer to win additional footfall and spend.
But in other locations, there could be clearer beneficiaries.
Data compiled by retail property consultancy Harper Dennis Hobbs reveals Debenhams is present in 17 of the 31 locations that House of Fraser is pulling out of – and could be well placed to attract new customers in the absence of its rival.
Table: Who could benefit from House of Fraser shutting stores?
|Department store retailers still trading in location|
|Locations where HoF is closing||Beales||Debenhams||Harvey Nichols||John Lewis||M&S||Psyche||Selfridges||TJ Hughes||Total department stores in location
|Monument, The City||✔||1|
In 11 of those locations, Debenhams would be one of only two department store operators remaining once House of Fraser pulls out.
In 10 towns, including Doncaster, Hull, Lincoln, Wolverhampton and Worcester, Debenhams would only have M&S for company, while its only department store competition in Bournemouth would be Beales.
Although M&S is present in all but five of the locations House of Fraser plans to leave, Harper Dennis Hobbs head of retail consultancy Jonathan De Mello believes Debenhams can be the biggest beneficiary – but will face competition from independent stores.
“Over the last 10 years House of Fraser have looked to create a different positioning and focus on fashion,” he says. “You could argue that Debenhams, to an extent, will be a key beneficiary because the M&S customer is completely different and quite a bit older.
“But the loss of House of Fraser should also benefit a lot of the independent retailers in those towns which are selling similar sorts of products, not necessarily the other department stores that are already trading there.”
Targeting new customers
De Mello believes faced with that competition, Debenhams will need to tweak its strategy in certain locations if it wants to attract former House of Fraser customers.
“They will need to diversify their product offer a bit more and target the types of customers that House of Fraser were targeting,” he says. “That will have to be done selectively, because not all locations will have the younger consumer that you might find in London, Birmingham, Manchester or Glasgow, so they will need to be careful.
“But they could certainly offer concessions that they weren’t offering before. House of Fraser has so many concessions that cannot be found in Debenhams, so they have an opportunity to target some of those brands and say ‘would you like to operate concessions in Debenhams instead?’ That would bring in some of those younger shoppers.
“The other thing for Debenhams is that they can now rethink their pricing strategy and become less promotional. House of Fraser is very promotional and Debenhams took heed when it came to offering money off.
“Now that they are the only department store in some towns, it makes sense that they can hold firm, discount less and sell at full price more often, because they should naturally have more footfall coming their way.”
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Data: Will Debenhams, M&S or John Lewis benefit from House of Fraser's CVA plan?