365
Fashion Jobs
ADIDAS
Senior Specialist, Buying & Trading, E-Commerce
Permanent · SEOUL
ADIDAS
Manager, Personalization & Apps, E-Commerce
Permanent · SEOUL
ADIDAS
Senior Manager, Legal Counsel, Legal
Permanent · SEOUL
HENKEL
Finance Business Controller For Shiseido Professional Brand
Permanent ·
L'OREAL GROUP
[l'Oreal Korea] Kiehl's - CRM & Trade Mkt sr. Specialist~Manager
Permanent · SEOUL
L'OREAL GROUP
[l'Oreal Korea] (jr.) Claim Substantiation Specialist - Corporate Regulatory Affairs
Permanent · SEOUL
L'OREAL GROUP
[l'Oreal Korea] (sr.) Product Manager - Kerastase Marketing Team, Ppd
Permanent · SEOUL
UNDER ARMOUR
Associate, HR Administration
Permanent · SEOUL
ARKET
Visual Merchandising Manager
Permanent · BUSAN
PUIG
Marketing Manager
Permanent · SEOUL
JAEGER
[Jaeger Lecoultre] Marketing & Communication Director
Permanent · SEOUL
ESTÉE LAUDER COMPANIES
Corporate Account Executive For Travel Retail Korea, Estee Lauder Companies
Permanent ·
ESTÉE LAUDER - BRAND
Assistant Education Manager, Estee Lauder
Permanent · SEOUL
L'OREAL GROUP
[l'Oreal Korea] Luxe Div. - Lancome E-Commerce Specialist
Permanent · SEOUL
COS
Instore Visual Merchandiser Manager_seoul/Gyeonggi
Permanent · SEOUL METROPOLITAN AREA
AESOP
Shinsegae Gwangju - Retail Consultant
Permanent · GWANGJU
COACH
Manager, Ecommerce
Permanent · SEOUL
ADIDAS
Manager, Business Planning & Analysis, Wholesales
Permanent · SEOUL
HENKEL
Adhesive Key Account Manager For Sports And Fashion Market
Permanent · BUSAN
HENKEL
Consumer Brands General Manager Assistant
Permanent ·
HYPEBEAST
Brand Partnership Manager
Permanent · SEOUL
ADIDAS
Manager, Retail Marketing - Originals, Brand Adidas
Permanent · SEOUL
Published
May 3, 2018
Reading time
3 minutes
Download
Download the article
Print
Text size

New investment could lead to House of Fraser recovery - analyst

Published
May 3, 2018

As the roughly 17,000 staff who work at House of Fraser stores digest news of its likely new ownership and soon-to-happen company voluntary arrangement (CVA), analysts have said that the new investment from C.Banner could lead to a recovery at the department store company.


The CVA and investment should help to turn around House of Fraser



The company said this week that C.Banner is to take over as its majority owner but also that it will go ahead with a CVA from next month and that an unspecified number of its 59 stores would close.

But analysts have highlighted the cash injection that has also been promised as being key for a slimmed-down House of Fraser to turn around its fortunes.

The company has had cash pumped into it by its current Chinese owner but the consensus is that it's not been enough. However, C.Banner – which also owns toy store Hamleys as well as its own fashion brand and retail businesses in China – will be investing tens of millions of pounds into the turnaround. And, of course, it has a much stronger track record in running fashion-focused businesses.

Charlotte Pearce, retail analyst at GlobalData, said of all this: “Another week, another retail CVA announcement. While CVAs are often only delaying the inevitable, this one does at least come with the promise of a cash injection to invest in the remaining stores, which have been starved of investment in recent years. 

“Terms of the CVA have yet to be revealed, but with reduced rents and the closure of weaker stores, House of Fraser’s brand is not beyond repair.”

She said that unlike recent CVAs from New Look, Toys R Us and Mothercare, which have in part stemmed from unnecessarily large store portfolios, House of Fraser’s smaller portfolio across the UK and Ireland is a more manageable proposition. And shedding a number of its legacy stores that are in second- or third-tier locations and are suffering from falling footfall is a sensible way forward. It may mean that House of Fraser is currently suffering more than other UK department stores, but it should also mean that it emerges much stronger once the portfolio is under control.
 
‘‘While House of Fraser is not alone in its challenges, its disastrous online sales, which declined 9.8% in H1 2017/18 following the implementation of a new £25 million website platform, mean that the retailer has been unable to prop up its total performance and weather the retail storm,” Pearce added.

“Turning its online sales around over the coming months will [also] be key to ensuring a positive future performance for the retailer. Though its latest ‘Blackout’ campaign is clearly aiming to drive both engagement and sales in-store and online, its continued run of discounting is unsustainable and will do little to help its operating margin, which was just 1.1% in its full year 2016/17. House of Fraser desperately needs investment to create stores in which it has the confidence to keep stock at full price for longer.”

The research specialist’s own data showed only 16.2% of UK consumers have shopped at House of Fraser in the past year. This is significantly lower than that of Debenhams (41.3%) and John Lewis (32%), showing that House of Fraser provides little in terms of differentiation to attract shoppers. 

Just 60.1% of consumers scored House of Fraser between 7 and 10 for range of brands, far lower than Debenhams (72.2%) and John Lewis (81.9%), showing that it needs to revamp its own brand and branded offer to attract shoppers. “Investment in its own brand ranges will be necessary to steal shoppers away from its counterparts, Debenhams and John Lewis, which are also focusing on their own brand, exclusive offer," Pearce concluded.

Copyright © 2024 FashionNetwork.com All rights reserved.