When Debenhams shuttered the doors of its last batch of shops last month, it was widely believed to be the last time we’d see the heritage department store on the high street. Especially when its new owners, Boohoo Group, have a strict online-only business strategy.
The department store chain had closed down its remaining 28 stores across the UK in mid-May, marking the final nail in the coffin in its 243 years of trading as a bricks-and-mortar retailer.
Debenhams had suffered slumping sales in recent years as shoppers moved away from traditional department store models. But the enforced closure of non-essential shops during the Covid-19 pandemic was the final straw for the retailer, and in April last year – just weeks after the first UK-wide lockdown began – it fell into administration.
Debenhams then went into liquidation in December after the administration process failed to secure any buyers to save the business. About a month later in January, its brand, ecommerce operations and assets were purchased by Boohoo Group in a £55 million deal. This deal did not include Debenham’s physical store estate.
As part of the liquidation process, administrators said it would run closing down sales across Debenhams’ remaining shops – which counted 118 in December – once they were allowed to reopen from mid-April onwards, depending on what the reopening dates were for each UK home country.
Although Debenhams’ high street stores closed for a final time a month ago, Boohoo Group said this week that it may open one small Debenhams store as it attempts to strike deals with major beauty brands.
The possibility of the heritage department store’s return to the high street comes as Boohoo Group chief executive John Lyttle expressed concerns that some beauty brands had refused to supply products to Debenhams unless it had a physical store presence.
Although the brands like Benefit, Elizabeth Arden and Ralph Lauren continue to supply to Debenhams as an online-only operator, the website does not stock make-up brands such as Yves Saint Laurent and Chanel, both of which were previously sold in the department store’s former bricks-and-mortar estate.
Lyttle said the firm was now in talks about opening one small Debenhams shop outside of London, but insisted it would be “one store and one store only”.
With mid-market department stores such as House of Fraser and John Lewis faltering for some time now, Boohoo’s plans for Debenhams presents a risky move. According to a 2021 report by Statista, department stores expect to see a decline as high as 17 per cent by next year. This downward trend represents a decrease of 1.7 per cent on a year-on-year basis, while sales value increased by just 1.3 per cent since 2017.
Liam Patterson, chief executive at marketing tech platform Bidnamic, labelled Boohoo’s decision to relaunch Debenhams on the high street as a small store as “unusual”.
“The iconic retailer only shut down its stores two months ago and the brand is still reeling from the pandemic and wider shift towards ecommerce,” he said.
“While the launch of a new store might be seen by some as a move to resurrect one of Britain’s oldest department stores with a revitalised new offering, the retailer needs to focus on solving structural issues first.
“Debenhams’ online presence is stagnating and the brand is losing out to competitors such as John Lewis and Amazon.
“The department store should therefore rethink its digital strategy and work on building out marketing strategies before revisiting brick-and-mortar.”
Marcel Hollerbach, chief marketing officer of product data integration company Productsup, argued that although Debenhams has had an online presence for some time now and ecommerce is expected to be a critical part of its operations, its fortunes go to show that merely having a digital presence simply isn’t enough on its own.
“Debenhams must invest further to bring its products to life for the modern consumer and to facilitate a truly omnichannel approach,” he said.
“Debenhams will return to UK high streets in some form, as Next has already shown that this strategy can work, but ultimately, it would be great to see this heritage brand really master the art of ecommerce and get back on its feet.”
Hollerbach added that the pandemic has driven significant growth in online shopping, but while many Debenhams customers will be completely comfortable with ecommerce, others won’t.
“The retailer’s core audience skews somewhat towards older generations, so the important thing will be to find the right balance, enabling Debenhams to maintain a foothold on the high street while continuing to invest in its online capabilities and selling to new audiences,” he said.
The pandemic has led to convenience becoming a key decision maker for shoppers as customer expectations continue to change. More and more Brits are now scrolling through a website or app from the comfort of their own home, clicking a button to browse or purchase, and expect delivery to be an option.
Carly Thomas, senior director at ecommerce service Digital River, argued that if Debenhams were to concentrate on future-proofing their ecommerce strategy – this may be all they need.
“Moving most of their business online is a smart idea as it plays into the whole convenience of online shopping as long as Debenhams continue to offer a wide range of products and brands,” she said.
“Furthermore, Boohoo has transformed the brands it has brought solely online – Oasis, Warehouse were once concessions in big departments stores are now growing brands in their own right.
“Having one retail store that allows customers to experience products is ideal. Beauty brands need a physical presence to sell their products – whilst augmented reality has come a long way, it’s still tricky to foundation match on your smart phone.”
Thomas added that by having one small store, Debenhams can be selective about what they sell, the experience they want to convey and the audience they want to cater for.
“While beauty is an often referenced example, they could also focus on areas like cookware and tailor the whole store experience around cooking and entertaining,” she told Retail Gazette.
“Conversely, restricting themselves to one store may have a negative effect on the brand and their customer base as it will restrict what is physically available to consumers, which isn’t the Debenhams many of us grew up with; they were a department store staple of the great British high street for over 200 years.”
It is becoming increasingly evident that department stores are struggling to compete with the big online marketplaces in today’s climate. Even successful brands like John Lewis are still grappling with the pandemic-induced accelerated shift from physical retail to ecommerce and Debenhams may need to stay out of the fray until it can create a solution that compels consumers to leave their homes and shop in-store.
However, having one store could allow Debenhams to perfect its offering before expanding elsewhere. Instead of pivoting back to its traditional high street model, a smaller store could provide Debenhams with the platform needed to explore new ways to target customers and help it create a seamless shopping experience that feels familiar to both those who prefer to shop online and those who value the high street.
While Debenhams has long been a mainstay on British high streets, the department store was suffering long before the pandemic. For starters, the administration it went through last year was the second of its kind that was launched within 12 months of the last one. It also underwent a CVA in late 2019 – which led to the closure of scores of stores right before the pandemic struck.
It’s clear that any relaunch needs to learn the lessons of the last decade.