AIMING HIGH: Sports Direct boss Mike Ashley, who purchased House of Fraser for 90 million pounds last Friday morning, revealed in an exclusive post-purchase interview with British tabloid The Sun, that he wanted to transform the retailer into “the Harrods of the high street.”
He said his plans are to stock luxury labels such as Gucci and Prada. According to Ashley they are “the biggest thing missing” in the department store today and that stocking those brands “will make a big difference.”
Not surprisingly, industry observers were skeptical.
George Wallace, chief executive of MHE Retail, said in an interview he thinks it will be very difficult for House of Fraser to attract luxury brands.
“The level investment that’s required in those stores to get to a standard where the likes of Gucci and Prada would be prepared to be present is really a massive amount, bearing in mind the size of the stores. Selfridges and Harrods have poured in hundreds of millions of pounds to create an environment supportive of a luxury product.”
He added: “The concept of big department stores in mid-size towns is under serious threat and past its use-by date. Having a luxury department store in a provincial city is not commercially viable.”
He also cited potential management issues: “After the history that HoF has had in the last four years, who is going to want to roll the dice of their career by joining that adventure?”
In the interview, Ashley also said he is throwing his weight behind customer-oriented services such as click-and-collect and personal shopping. “You get that kind of personal shopping service in Harrods. There’s no reason why it couldn’t be rolled out nationally across House of Fraser,” he told the tabloid.
Sofie Willmott, senior retail analyst at Global Data, the data analytics company, said she has doubts whether Ashley can replicate the high-end model. “It is questionable whether the high-end price points would appeal nationwide, particularly given that London-based department store retailers have benefitted from tourism.”
Ashley said he plans to mirror HoF’s new strategy to that of multibrand retailer Flannels and Sports Direct, both of which he owns. He told The Sun that “cool brands of the moment” will save the 169-year-old retailer which has only housed mid-market brands.
He also vowed to keep 80 percent the department store’s 59 outlets open despite earlier reports that a number of higher-end fashion brands are looking to withdraw their concessions over the next few weeks.
As part of a restrucuring plan set out in June, HoF management agreed to shut more than half of HoF’s 59 shops.