Digital-first, fast fashion retailer, Boohoo, has confirmed it will buy department store, Debenhams, for £55million – but its decision to only buy the brand and its website, including customer data, will come as a kick in the teeth for the High Street, as its 118 remaining stores are left on the shelf facing permanent closure, with 12,000 jobs set to go.
Once a retail stalwart, the sale of the beleaguered department store chain puts an end to its 242 year history on the High Street – but should we be surprised, or was the writing already on the wall for Debenhams?
Speaking to BBC Radio Wales, Retail Connections’ Chairman and retail analyst, Chris Field, suggested the fate of the department store was already on the cards:
“Over a year ago, even before the pandemic, the writing was on the wall for the department store, sadly. The department store as a retail format is finished – there may be a little bit of space left for smaller, specialist department stores, but that category has gone, I’m afraid.”
“If you think about Amazon as an online department store, or marketplace, that is the future. And that’s what has prompted Boohoo to invest in the Debenham’s brand, without burdening itself by taking on the ball and chain that is its store estate. The digital marketplace is the model that Boohoo and others, like ASOS who just announced their bid to buy Topshop yesterday, are all moving towards – it’s all about the brands, suppliers and supply chain and not about the stores – the future is online. In fact, it’s already online.”
Commenting on the acquisition, Boohoo’s executive chairman, Mahmud Kamani, described the deal as ‘transformational’ and ‘strategically significant’ as it looks to grow and diversify from its sweet-spot of fashion into other categories.
“[The] deal allows us to capture the fantastic opportunity as ecommerce continues to grow. Our ambition is to create the UK’s largest marketplace. Our acquisition of the Debenhams brand is strategically significant as it represents a huge step which accelerates our ambition to be a leader, not just in fashion ecommerce, but in new categories including beauty, sport and homeware.”
With online retailer ASOS also in exclusive talks to snap up Arcadia brands, including Topshop, Miss Selfridge and Topman, the online marketplace model is gathering pace and could potentially take more retail businesses off the High Street. But that doesn’t necessarily mean the fate of the High Street is sealed. There’s still room for speciality retail stores, like Selfridges and Harrods, who deliver a more specialist offer closely aligned with the brands that they sell, Field suggests.
“If you make the experience of shopping exciting, fun and specialised, then shoppers will come – and I think there’s a huge amount of pent-up demand out there from all of us sat behind our PCs at home wanting to get back to something we would describe as exciting. So, there is a future for the High Street but it’s more mixed – blending residential on top of stores, offering up more services and certainly an increased footprint of local retail.”
Listen to the full interview with Chris Field on BBC Radio Wales, here: