Congratulations to Sir Mike Ashley for saving House of Fraser, one of our much-loved department store chains. He wants to make it like “Harrods of the High Street”. Wow, it sounds great. Just let’s see how many jobs he can save. It may be a tall order, yet he has a reputation of putting into practice what he promises.
House of Fraser (HoF) fits well with his other enterprises, especially if he keeps to the high-end of the market. HoF will benefit directly from Sports Direct’s lucrative toe in the US market where it holds concessions in Macy’s department stores. Macy is a name that US customers recognize, so the sale becomes easier. Very clever and profitable as he markets aspirational leisurewear and trainers, responsible for the 29% profits’ spike.
What is HoF full of? You’re way ahead: concessions. The stockmarket has already noted that there is a thinner profit margin when targeting the less affluent. However, this asset class is also susceptible to aspirational products like those at Macy’s.
HoF already offers online shopping and it is a real pleasure to pick up your purchase promptly in a pink HoF bag. Wrap your products like Monsoon does and you will have more repeat purchases from more than one target market.
Unfortunately, the fly in the ointment is that the whole premise of going to a shop and looking at a blur of choices is sadly out-of-date.
We need to make it exciting and fun! An idea about department stores with concessions that will see profit go stratospheric, is coming shortly.
I do not know about you but I am bored by department stores. You go in, are faced by a myriad of choice and wander to another department, then go to the café for lunch. Cafés could be the hub of the store, where friends can meet and compare clothes on their ipads or dare I suggest a constant catwalk of real- life models, not waifs, that they can scan into their ipads and have them ready to try on as quickly as possible.
It is time to make department stores more exciting and Sir Mike Ashley may be the one to do it. He is a maverick to the long-suffering stockmarket, who ten years ago, was flummoxed by a company leader who was not bothered about posting profit and loss.
Time maybe to offer bonuses to all of his staff. Incentive is required in the UK retail market. He rewarded his son-in-law with a £5m bonus (how generous is that), for keeping SPD’s property investments buoyant. The commercial property along with the residential market is stuttering. But commission as part of income makes people desperate. None of us wants to see that. The more generous a boss, the greater the staff loyalty by sheer hard work.
The truth about JD Sports and Mike Ashley is actually that he saved the former by taking a 10% stake, after they hit a low patch and were casting around for a cash injection. The CEO’s had been mates for years. Now JD Sports does not need him anymore, he has sold his stake.
There is every reason for employees to be happy if they step up their sales activities in their department and impress the boss. To him, please save or top up the pension fund, so your staff and the rest of us can rest easy.
PS May purchase of Debenhams be a step too far like HBOS was for Lloyds? No time for enough due diligence almost sank Lloyds. Debenhams has been in the doldrum for years, packed with products in confusing disarray.