One of the country's famous department stores may be on the verge of disappearing from the high street, according to the CEO of Frasers Group, Michael Murray. In an interview with the Telegraph, Murray described House of Fraser as a "broken business" and stated that the company's strategy is to move away from the traditional operating model of department stores. He predicts that House of Fraser will diminish while Frasers, the new brand they are building, will grow.
A "broken business" in need of change
Since it was bought by Mike Ashley in 2018, more than 20 House of Fraser stores have closed down, and Murray believes the traditional operating model of the chain needs to be revamped. He stated that the stores were too large and under-invested, relying heavily on concessions. The focus now is on building the Frasers brand and working towards a fresh vision for the company.
Reducing store sizes
Murray also mentioned the group's strategy of reducing the size of some department stores, stating that most department stores could achieve the same turnover with half the space. This move aligns with their plans to break away from the traditional department store model and adapt to changing customer preferences and shopping habits.
Success in profits and sales
Despite the challenges House of Fraser faces, Frasers Group has seen significant financial growth. Pre-tax profits have almost doubled, from £335.6 million to £660.7 million in the year ending April. Sales have also increased by 15.8%, reaching £5.6 billion. Murray attributes this success to the group's diverse range of brands and their focus on attracting a younger demographic, who have been less affected by recent financial hardships.
Given the ongoing changes and challenges in the retail industry, it remains to be seen if House of Fraser can overcome its current struggles and evolve to meet the changing demands of consumers.
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