News that House of Fraser has been bought out of administration by the parent organisation of Sports Direct is good news for tens of thousands of employees whose future was hanging in the balance.
It will also be of some relief to Fossil Group, which runs the departments store’s WatchStation concessions, although it is reported that Sports Direct still plans to close around half of its 59 stores in the UK.
Mike Ashley, owner of Sports Direct, said on Friday that he wants to turn House of Fraser into the Harrods of the high street.
That is a neatly alliterative headline, but hardly realistic. I don’t see Cartier, Van Cleef & Arpels or Dolce & Gabanna banging on the door of House of Fraser in Milton Keynes demanding space.
I think House of Fraser needs to take a lesson from the jewellery and watch retail industry over the past two years, and give more space to fewer brands in its department stores.
As a shopper, I always wonder why I would go to a department store to look at a small selection of items from the likes of Ted Baker and French Connection, when I know there is a full branded store with a much bigger selection down the high street or in the same shopping centre.
Jean-Claude Biver, CEO of TAG Heuer and president of the LVMH, says jewellers need to compete with monobrand stores by assigning more space to each watch brand so that they have an attractive range of stock for each brand. The multi-brands then has an advantage over mono-brand stores because they offer a choice of, for example, divers’ watches from multiple watchmakers.
The other thing jewellers have done in recent years is push upmarket in their brick and mortar stores, while using their online platforms to sell the high volume watches from fashion and lifestyle brands.
Aurum Holdings did this well when it closed its Boutique Goldsmiths stores and shifted the value end of its watch portfolio online to Watchshop.com.
The Fossil Group-run WatchStation concessions in conjunction with Houseoffraser.com should go the same way. In store, these concessions should focus on watches costing £400 or more. Everything else can go online.
The rescue of House of Fraser will not be easy, but it is possible. The experience needs to improve so that shopping for fashion, accessories and timepieces is fun an informative. If Mike Ashley gets this right, each House of Fraser has the potential to become a destination that people will be happy to seek out and travel to; a little like Harrods, now I come to think of it.