Even though Debenhams has announced store closures under a proposed CVA, the retailer is far from being alone in experiencing high-street woes. Numerous retailers, including House of Fraser, New Look, Next, Arcadia, and Marks & Spencer have been facing increasing financial difficulty on the UK high-street, while others, such as Toys R Us, have exited the market altogether. Debenhams’ difficulties are the result of an often seen tale of too many stores, too much debt, and a failure to keep up with consumer trends.
On top of the problems that have been so familiar to the UK high-street, Debenhams has also seen its brand lose importance in recent times. There has been a distinct failure to market the brand and appeal to a new generation of younger consumers. A recent plan to rebrand as part of the company’s ‘Redesigned’ strategy has been slow to roll out and has failed to have any significant impact.
Closing stores is absolutely necessary for Debenhams in terms of not only reducing costs but also so that the business can be streamlined with a focus on revamping the stores that remain. As the number of bricks-and-mortar stores are reduced there should be a greater emphasis on the company’s online offering so that it can better compete with the likes of John Lewis, which sees over a third of sales coming from e-commerce.
There must be an increased focus on the products and services the retailer offers so that it can better cater to consumer demand. The problem here is that while revamping stores and refreshing the product offering is going to be the way in which the company can make the most visible changes, this is going to further hinder financial growth. With the precarious financial position the retailer is in, the extent to which investments can be made in such areas is questionable.