On Monday (7 April) Debenhams rejected a £200m offer from Mike Ashley’s company Sports Direct International PLC to underwrite the retailer’s debt. Reports claimed that the offer was turned down because Ashley wanted to be the new chief executive: if I was giving away millions of pounds, I imagine I’d want a grown up job title too Mike.
Ashley isn’t known for mincing his words and in his statement on the matter he declared politicians and regulators working on the deal to be as "effective as a chocolate teapot".
Retail has been my industry for 20 years and I still love it. Hearing another retailer has gone into administration is never nice but we have to face facts: retailers that fail to innovate will fail and mediocrity won’t cut it. You have to make shopping brilliant.
I can’t imagine saying no to Ashley was an easy decision to make, especially when you employ thousands of people who rely on your business to feed themselves and their families. However, and excuse me while I quote Kanye West: "no one man should have all that power" and you know what Kanye is right.
It’s not OK that our current retail landscape has fallen into the hands of a small group of men. No good can come of that. You only have to look at the toxic media landscape to see what happens when power sits with the few. Especially if your surname happens to be Murdoch…
Looking at this news through that lens, I think it’s a good thing that Debenhams rejected the offer. We need to protect our high streets from becoming homogenised and soullessly slotting into some old hierarchical structure.
Take House of Fraser. While it wasn’t widely known as a beacon of our high street, anybody who has visited a House of Fraser since Sports Direct bought it can feel that what little soul it did have, has most certainly been stripped back. Maybe there’s a bigger plan at play? We’ll have to wait and see.
Not Fit for Purpose
The truth is simple: Debenhams, like House of Fraser, isn’t fit for purpose. It was in far too much debt. It had a £640m pound albatross hanging around its neck and too many stores that weren’t offering anything new to their customers. The CVA talks reported last year were, of course, necessary but they are not a quick fix to the deep problems Debenhams has.
It’s not all bad though. Opening stores in Wolverhampton, Watford and Stevenage was a smart move and placed Debenhams as a jewel in the crown of tertiary towns.
The 'beauty hub' concept Debenhams launched with Estée Lauder in its Stevenage store last year was inspired. And the partnership with Blow that launched a series of blow dry bars across five stores was a move in the right direction, but it didn’t go far enough.
It all feels a bit too little too late, especially when you consider the last big innovation that had a real impact was Designers at Debenhams... 26 years ago. 26!
The retail marketplace in 2019 increasingly values connection over anything else, and retailers like Debenhams need to consider entirely new ways of establishing deeper relationships with their customers.
Wellbeing, co-working, food and drink and fitness are all growing sectors.
Retailers must innovate and consider how they can create spaces where people can come together to connect and learn and be inspired.
Imagine if Debenhams dedicated spaces to wellbeing and nutrition instead of discounted dresses and a load of old shoes?
Or, what if every store had a floor dedicated to affordable co-working? The options are plenty but they are options that need to be taken.
This isn’t the last we’ll hear of Debenhams and thank God, as there are a lot of jobs on the line. I hope with this news it reflects on its failings and begins a new chapter, one where customers are put at the heart of their business decisions.
One that considers people, not profit.
Caireen Wackett is managing director at shopping consulting and creative agency Portas