Making sense of the past seven days
Take a look at House of Fraser's web site and you'll probably be surprised how rudimentary the online range is.

The only items for sale are flowers, Virgin gift experiences and vouchers - a meagre offering compared with those of close rivals such as John Lewis or Debenhams - never mind multichannel giants such as Argos, Next or Tesco.

The absence of a convincing internet offer is just one example of the potential in House of Fraser that could be tapped into by Baugur which, as we report in this week's issue, is expected to unveil a formal£350 million offer for the department-store chain next week.

No big retailer can afford to be without a multichannel division these days, if it hopes to retain its position. Yesterday, the latest figures from communications regulator Ofcom showed that half of UK households now have a broadband connection and the implications - for business sectors ranging from retail to media - are enormous.

Many big store groups have been keenly aware of the challenges facing their traditional business models and the opportunities that the digital era brings.

Online purchases now account for about 10 per cent of total retail spend, IMRG research shows, and internet sales are likely to top£30 billion this year.

John Lewis's response to changing times has been among the most effective and sales at its Direct business are booming. In the week to August 5 alone, the retailer reported sales through were up 106.7 per cent.

As Baugur prepares to table its offer for House of Fraser, no doubt it will know exactly what it has to do to generate the returns it requires and many of the conventional private equity methods will be employed.

However, it would also make sense for Baugur to ramp up House of Fraser's presence in cyberspace.

The development of a serious online business, with the efficiencies and opportunities for range extension that the internet brings, would potentially represent real value creation.


The chaos yesterday at Britain's airports brought back uncomfortable memories of 9/11 and last July's London bombings.

For retailers, especially in the capital's West End, tourist business is key to success. The disruption of transatlantic travel and the possibility that US visitors will avoid flying to the UK will worry store chiefs.

However, there was no sign of panic in Oxford Street and its shops yesterday. In Selfridges, I bumped into chief executive Paul Kelly who was walking the store.

He seemed happy with the level of trade in his shop, but of course could not forecast any longer-term effect the terror scare may have on tourist sentiment.

In uncertain times, it's important to carry on with business as usual - that in itself is a vital plank in maintaining confidence and, in turn, attracting customers. On yesterday's evidence, the fantastic range and quality of experience in London's best shops was still drawing them in.