Debenhams: another big British chain in trouble
Today it was announced that the British department store chain Debenhams was to close 50 of the stores it operates in the UK, leaving it with 116 (in other words, nearly a third of its capacity). 22 of these were named today and they include, for example, a store set up in a refurbished shopping centre in Wolverhampton which was opened with much fanfare in 2017 when it replaced a branch of the collapsed BHS (originally British Home Stores) chain. A large part of the reason is that customers have been switching to online purchasing and the department stores can no longer afford the high rents on ‘prime’ retail locations such as in major shopping centres; Debenhams is seeking to renegotiate rents on all but 39 of the remaining stores, seeking reductions of between 25% and 50%. At the same time, Marks and Spencer plan to close 100 stores this or next year while House of Fraser has been shutting shops after being bought out of administration last year. The rise of online retail is being blamed for the collapse of some of the large retail companies; it is noticeable that the companies with a strong online offering, such as M&S and John Lewis, are in no great financial trouble even though some of the stores themselves are proving unprofitable.
It’s no secret that buying online is a lot easier than buying in a store and often a lot cheaper, as large companies such as Amazon benefit from greater economies of scale, operating a small number of vast warehouses and contracting out the logistics to haulage companies and, at the local level, self-employed couriers. Many a shop owner will tell you that people will come into their shop, look at an item, find it on Amazon using their smartphone and order it there and then, leaving the shop empty-handed. Amazon started as a bookseller, and while they can offer large discounts on often expensive books, they also operate the e-book system Kindle; the upshot is that even large physical booksellers such as Foyle’s in London now sell fewer technical books. The computing section used to fill several rooms; now it barely fills one wall of shelves, much as used to be the case in suburban branches of Waterstone’s. But convenience and low cost is only half the story.
Debenham’s does not have its own brand of clothing. Its clothing sections are grouped according to concession. It is effectively a large mall full of lots of little shops which sell all of the types of clothes they sell in one space. Allder’s, a similar chain which collapsed in 2005 (although one branch was bought out and continued trading until 2012), operated on the same basis, as does John Lewis (although they have a small range of own-brand clothes) and House of Fraser. M&S sells its own products, though it groups them into different brands which have their own areas of the shop. This is particularly the case with ladieswear; menswear, particularly in M&S, is more sensibly grouped together with, say, men’s chinos and jeans in the same area of the store. But if you want a particular type of skirt or dress, for example, you will have to hunt through the entire store because it could be anywhere on more than one floor. Meanwhile, it is fairly easy to search for such an item simply by using the store’s own website or mobile phone app, which can sometimes tell you if a store has it but not where. So, the companies have really done their stores a disservice by providing a much easier way of searching for their own products.
And it has to be said that quality has gone down in the past few years, particularly in women’s clothes. It was no surprise to hear, for example, that Monsoon and Accessorize were trying to renegotiate their debts and rents after their parent company had suffered tens of millions of pounds in losses year after year while sales remained flat. This company has also been closing stores all over the place and plans to close more as leases expire. Monsoon clothes used to be exquisite; today, they sell an ever-changing range of colourful but often poor-quality garments for around £100 each. Looking for a birthday present for someone this past week, I found a lot of paper-thin (and unlined) skirts and dresses retailing for around £70 when the quality really could not justify it. (One of them had a nice blue and white pattern with pockets, so could be quite practical, but again, paper-thin and when I came back to have another look after a few days, they were no longer selling it.) M&S’s ladieswear has seen a similar decline in quality in favour of thin clothes often made with polyester, a frequent complaint being that the actual garment was of poorer quality than it appeared in a photograph; its Per Una range was exquisite when first launched (here are some examples from 2007). Meanwhile, this denim skirt, made of good quality fabric by the look of it but plain and not exactly original, is going for £115 in John Lewis.
Is it any surprise that people are looking elsewhere for their clothing, rather than to companies which may think they have a ‘right’ to people’s business because they have been around a long time, or were what people “grew up with”? It really is not, and these dinosaurs who think their mere names can keep them in business when they sell clothing that is barely above rag-trade quality for several times the price need to up their game or they will have to up their sticks very soon.
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