What’s happening to Mike Ashley’s plan to make House of Fraser the “Harrods of the high street”? If you’ve stopped by the Dundrum outlet of the store of late, particularly in the homeware section, you might well be considering that very question.
Just seven months ago, Ashley’s Sports Direct took over the beleaguered UK chain, with a vision of transforming it into an even more upmarket department store. And already the Dundrum store is ringing the changes.
Where once you could peruse Le Creuset casserole dishes or the latest Nespresso machine, now you'll find Adidas runners and tracksuits. Where once upmarket bed linens and cushions were displayed, you'll find rails of discounted Sports Direct-owned brands such as Lonsdale, bundles of Everlast socks, and racks of sports bags, while the menswear department in the basement has been similarly atomised.
The purveyor of cheap sports gear, much of it produced under the group’s own brand, has not quite reduced the Dundrum outlet to another sports warehouse-style store, but the changes have been significant enough to alter the tone of a once high end(ish) department store.
Delivery fee
There have been other changes, too. Before, you could shop on the group’s UK website and get the goods delivered to a desk in the Dundrum store. This option is now gone. Just like purchases on sister site Sports Direct.com, Irish customers now have to pay a delivery fee to get goods shipped here (from £5.83/€6.83), not unlike Sports Direct’s charge of €6.99.
The changes happening in Dundrum are not unique to Ireland. Across the UK, stores are also taking on the Sports Direct identity, with suggestions that as much as 50 per cent of clothing in some House of Fraser outlets now comes from Sports Direct’s own brands, such as Firetrap, SoulCal, USA Pro and Karrimor. You can also now shop these brands on the department store’s website.
At the same time, House of Fraser is understood to have slashed production of its own brands, including Linea and Biba, which could leave a big gap on the womenswear floor in Dublin.
At least some new brands are coming. Following the recent closure of French Connection’s own outlet in the shopping centre, it is understood to be opening a new concession in the department store.
Online v bricks and mortar
Mr Ashley’s avowal to make House of Fraser more upmarket, and his subsequent actions which seem to have taken it in an entirely different direction, could be viewed as a response to market conditions. After all, who has a wedding list anymore to necessitate the purchase of multiple crystal wine glasses, coffee machines and china plates that previously populated the department store’s top floor?
Retail, as we all know is going through a tough time. No wonder then that some investors are selling out of the sector altogether. Last year, property investment company Green Reit, which once counted the Westend Retail Park in Blanchardstown, Dublin 15, among its assets, said it was “out” of retail.
The unstoppable march of online retail has undoubtedly been a key factor behind this decline.
To date, shops themselves have had a somewhat curious approach to this attack – arming themselves with efficient e-commerce machines, but at what cost to their bricks and mortar branches?
Special occasion
Earlier this month I found myself in The White Company on Grafton Street, in search of an outfit for a special occasion. While I might have found it there, the store isn’t cheap, so I opted to leave my chosen skirt behind, in favour of logging on later to see if I could get a better price online.
Lo and behold, thanks to the proliferation of online vouchers you can access through sites such as vouchercloud.ie, I got 10 per cent off, and free delivery within a few days. If I’d tried a bit harder I could have gotten a further 10 per cent off by ordering the skirt through the company’s UK site in sterling, and getting it delivered (albeit for a charge) via a company such as Parcel Direct to a locker near me.
Flagship sites
It makes you wonder then, why stores are paying such a premium for flagship sites on central shopping streets, and how long they will continue to do so.
Rents on Grafton Street may still be about 50 per cent less than they were in those heady days of 2008 when it pitched up as the fifth most expensive retail street in the world, but they’re still expensive. At about €3,794 per square metre, the street is still the 13th most expensive in the world.
If retailers such as The White Company are offering better value through their online shop, and therefore driving business through this channel, why is it paying an annual rent of about €750,000 a year for its Grafton Street flagship outlet?
More pertinently, is this going to be a sustainable strategy in the long-term?
Out in Dundrum, Mike Ashley thinks his solution to the retail conundrum is to sell more low cost sports goods. Whether this can secure the chain's future better than a "Harrods" style approach remains to be seen.
