Retail change and the end of the House of Fraser

It seems that we’re watching the death throes of the House of Fraser – or at least of the House of Fraser brand. How much of this is a sign of the broader changes in retailing, and how much is the story of a poorly managed brand?

For the second year in a row Frasers Group, owners of the House of Fraser, have been unable to produce their financial results on time. When the results came, they came with an extraordinary threat to close stores if landlords did not agree to restructure rental agreements to link rent payments to sales figures – not to property or leasing values.

It seems that we’re watching the death throes of the House of Fraser – or at least of the House of Fraser brand. It’s easy – and lazy – to try and draw a line between Sports Direct taking control of the House of Fraser in 2018 and its current state.

But House of Fraser has always been a bit of a confused miss-mash of stores and target markets, and this lack of clarity about the market segment it wants – not to mention which market segment it actually has – is a big part of the mess that it’s in. Is House of Fraser Harrods Lite? Is it a direct competitor to John Lewis? Or is it Debenhams Extra?

Many things that the House of Fraser have done have been confusing, with the purchase of Jenners in Edinburgh in 2005 being a perfect example – having closed 5 branches of Frasers across Scotland in 2004, why then buy a rival to your Edinburgh store that’s a couple of hundred yards up the road, and turn it into a clone of your existing store? And why let both stores stagnate for the next 15 years?

The two House of Fraser stores in Edinburgh are separated by a large branch of Debenhams, a rival – but arguably more down-market department store. But this was the market that the new House of Fraser targeted, almost completely abandoning the high-end trade – except in their Glasgow store.

Since the House of Fraser Group was bought by Highland Group Holdings in 2006, it has relentlessly moved downmarket and away from the Harrods Lite positioning when it was owned by the Al Fayed Group. Debenhams Extra it was.

Down-market, relying on your own brands rather than name brands… it’s no wonder Mike Ashley and SportsDirect wanted in. But Frasers Group apparently has a different plan – to move back upscale a la Frasers in Glasgow and “to create a superior shopping experience for the consumer“.

What that means is that more stores will close, and the Frasers brand will be rather different to the House of Fraser. We know they can do faux upscale – these are the people who run Jack Wills after all. And we know consumers increasingly care about the experience rather than the product per se. But Sports Direct is a fairly toxic brand to many consumers, who avoid both the store and its extensive network of sub/own brands. (This is why Jack Wills is marketed as ‘owned by House of Fraser’ and not by SportsDirect.)

Whether Frasers can capture the lifestyle market segment who used to shop at Habitat, who now rely on John Lewis, and who regard Ikea as a necessary evil, is a different question. Sports Direct has failed to become the ‘Selfridges of Sport‘ – can they make Frasers into the next Habitat?


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