By  on April 20, 2017
Debenhams store

LONDON — So what does a former Amazon Fashion executive do, now that he’s got 176 brick-and-mortar stores to manage across the U.K. and Ireland?Turn them into spas and salons, bars and restaurants, fashion runways and social hubs so that customers visit more frequently — and linger for longer.Debenhams chief executive officer Sergio Bucher plans to do it with mobile, and erase the boundaries between online, in-store and, in some cases, at-home shopping. The strategy shouldn’t come as a surprise as Debenhams said its multichannel shopper spends nearly three times more than the in-store one or the online one.“Welcome to social shopping,” said Bucher as he laid out his new strategy Thursday after six months in the job. He revealed his roadmap as Debenhams reported a 2.9 percent upswing in first-half sales to 1.68 billion pounds, or $2.08 billion, and a 6.4 percent drop in pre-tax profit to 87.8 million pounds, or $108.9 million.But as far-reaching as Bucher's plan appears, he failed to convince investors that it will work. Debenhams' shares closed down 5.1 percent Thursday after his plan was revealed.Bucher, who was previously vice president of Amazon Fashion Europe and who has held executive retail positions at Puma and Nike said he believes offline and online need each other to thrive and mobile is the “new blood” of retail because it allows a store to build direct relationships with its customers.Capturing customer attention is more important than ever because leisure activities are increasingly taking a big bite out of overall consumer spending. Bucher said successful retail today is about “wrapping” merchandise in a set of experiences rather than just selling it.At a time when British high-street heritage brands and retailers are collapsing due to competition, bad management, discounting and onerous leases, Bucher and his team are bullish about the future of Debenhams, the premium department store chain best known for its robust beauty business and Designers at Debenhams' fashion and home collections.Bucher’s job will not be easy: The store has had to compete with hip, sophisticated high-street chains at one end of the market, and the U.K.’s buzzy luxury department stores, such as Selfridges, Harrods, Harvey Nichols and Liberty, at the other.Last year, Bucher succeeded Michael Sharp, who resigned after a raft of disappointing results, profit warnings and increasing pressure from fed-up shareholders who have watched the retailer’s market share erode over the years.During a presentation on Thursday, Bucher admitted that Debenhams has a long road ahead: He is looking to make the business faster and more efficient, to de-clutter the store environment, and slash the product offer by 10 percent. He also wants quicker replenishment.There are also plans to shut one central distribution center and 10 smaller regional warehousing facilities. Bucher could also close up to 10 U.K. stores over the next five years as part of a plan to simplify the business model and make more effective use of people, inventory and infrastructure.Debenhams has to rebuild its online offer, change the feel of the store interiors, and evolve from a “push” model to a “pull” one, based on how the customer is behaving, he said.The store has earmarked 150 million pounds, or $192 million, in capital expenditure, per year, over the next three years. Bucher said he and his team plan to “test and learn, test and demonstrate,” over the next months and only invest in strategies that promise the highest returns.A pillar of his plan is to bulk up the beauty business, which represents 25 percent of the store’s turnover at 700 million pounds, or $897 million.Bucher said he thinks he can grow beauty into a 1 billion pound, or $1.28 billion, business, by becoming a market leader in beauty and services, such as express blow-dries, makeovers, nail bars and eyebrow grooming.He said the 4 billion pound, or $5.1 billion, beauty services industry is fragmented, local and dominated by small players — and he wants Debenhams to grab a big slice of it. The store plans to trial a service where Debenhams consultants travel to customers’ homes for beauty-related appointments.Debenhams said its customers, on average, live 17 minutes away from their nearest branch, and the store plans to use the proximity factor to its advantage.Debenhams already claims to be the number-one premium makeup destination in the U.K. and the number-two beauty one. As part of its ambitions for the division, it’s planning more than 400 product and service launches over the next three years.Bucher said he wants the energy of the beauty halls — as well as digital innovation — to impact other areas of the store such as clothing and accessories, with plans for in-store events, fashion and beauty shows as well as an enriched food and drink offer.There are plans for a “click and collect and play” service with a personal shopping dimension, yet another move to get shoppers moving seamlessly between online and off-line — and making more visits to the store.The average Debenhams shopper visits the store two to three times a year, and Bucher’s team believes if it can convince that shopper to make one more trip, it would add 1 billion pounds, or $1.28 billion, to the store’s top line.The store is also examining its fashion offer, and its well-known Designers at Debenhams program, which for decades has taken top fashion names and handed them a lucrative deal in exchange for regular, exclusive collections, often across multiple categories.Designers on Debenhams’ roster include Jasper Conran, John Rocha, Julien Macdonald, Matthew Williamson, Jenny Packham, Henry Holland, Patrick Grant, Jonathan Saunders and Marios Schwab. Preen has recently joined the lineup.The Conran business has long been a winner — it notches 100 million pounds, or $128 million, in annual sales across multiple categories such as clothing and home — while Patrick Grant’s tailored men’s wear, Matthew Williamson swimwear and Frost French beachwear are also thriving.“Designers at Debenhams is an asset, and we want to breathe new life into it,” said Bucher, adding the program could be a major growth engine, and he plans to “phase out” those designers who are no longer relevant.Suzanne Harlow, group trading director at Debenhams, said the team is working its way through the existing designer portfolio, seeing how the businesses can be “reimagined,” and potentially getting the designers more engaged with their customers.On Thursday, Kate Ormond, lead retail analyst at research firm Global Data, said the plan to manage the Designers at Debenhams portfolio more robustly is “long overdue,” given how extensive the range has become.“The axe needs to fall on many brands. There is still life in the concept, but refreshing designers more regularly is a must, and Debenhams must take action more swiftly if ranges are not working and have lost relevance,” she said.Ormond added that Bucher’s strategic plan gives Debenhams “plenty to do” over the next three years, and while focusing on experience and leisure will please existing shoppers, “customer acquisition will remain a challenge, given the impressive competition.”

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