As Debenhams unveils its new location at the Intu Watford shopping centre, Drapers delves inside the department store’s turnaround strategy and investigates whether beauty, experiences and gin can secure its future.
Reports about the death of the department store have been greatly exaggerated, Debenhams’ senior team believes. Earlier this week, bosses from across the business – including quietly confident chief executive Sergio Bucher and Steven Cook, the charismatic managing director of fashion and home – showed off the retailer’s new 80,000 sq ft Watford store, which opens tomorrow (27 September).
Bucher and his team shared their vision for a whole new Debenhams. Both the store and the overall strategy are centred around three key pillars: curation and newness, service and services, and digital integration.
Debenhams, Bucher explained, has spent the last 12 months testing and trialling new initiatives across the wider business and in its Stevenage store to create a compelling customer experience on- and offline. By focusing on the concept of “social shopping”, the retailer hopes to “inject joy” back into retail and encourage customers to visit stores, rather than websites.
“For way too long, bricks-and-mortar retailers have allowed their stores to be warehouses full of product with a till at the door and poor service,” says Bucher. “That is exactly what we are going to address through our Debenhams Redesigned strategy. If we are to be successful against the pureplays, we have to offer great reasons for customers to come and shop with us. Clearly, online is convenient, but shopping is one of the favourite pastimes of this nation. You have football, you have rugby and you have shopping.”
The former Amazon executive added: “We have to make sure we can make shopping fun again and that every trip gives customers something memorable – whether it’s the product, the friends you were with, or the meal or drink that you had. It is our mission to make shopping sociable and fun.”
At the Watford store, shoppers can eat at healthy food-focused seasonal restaurant Loaf & Bloom, have a facial, sip a pink gin or visit a blowdry bar. The jewel in the crown of the new shop is the industrial-themed beauty hall, which is home to lab spaces dedicated to highlighting up-and-coming brands; a beauty “clubhouse”, which can be used to host events; and a pick-and-mix style “beauty minibar” that gives customers the chance to experiment with smaller, travel-size products. Shoppers can pick from around 40 brands in the beauty hall, compared with between 18 and 20 in a traditional Debenhams store.
Although Bucher stressed that Debenhams remains a profitable business – joking that it is a fact he almost forgets when he reads press coverage of the retailer – it must innovate if it is to survive. He is battling the retailer’s reputation for constant discounting and outdated stores, and Debenhams has issued three profit warnings so far this year, blaming “exceptionally difficult UK trading conditions”. Pre-tax profits for the full year are now expected to reach £35m to £40m, compared with previous estimates of £50.3m. It also mulling the sale of its six-strong Danish department store group Magasin du Nord, which it acquired in 2009, to generate cash in the business.
What we really wanted to do was understand the Debenhams customer
Steven Cook, Debenhams
A strong womenswear offer will be key to ensuring Debenhams retains its place on the UK high street, particularly given rival John Lewis’s ongoing focus on exclusivity. A simplified internal buying structure and more distinctive handwriting among its own-brand offer will allow Debenhams to compete, former Holt Renfrew chief merchant Cook explained.
“When I started this journey, what we really wanted to do was understand the Debenhams customer – who they are, who they aren’t, how we are treating them and what they need from us,” he said. “We’ve been on a journey to find out how we can work most efficiently to serve the right product to our customer, at the right time, through the right channel. Historically, every one of our business units was run differently. There was no synergy, and it made a universal approach really challenging. We’ve put in place a consistent structure, shrunk nine levels of merchants into three and now have a business unit owner on each team. That is the buyer, and they own the [profit and loss] of their business, and they own product.”
Debenhams will also focus on giving customers newness. The retailer has used data to redraw the way it designs and develops products to ensure a constant flow of fresh product, and new styles will be highlighted in store. In the Watford branch, a “New this week” area will draw customers to the best fresh designs from across different brands.
We’ve been differentiating the brands and really making sure each has its own identity
Sara Bradley, Debenhams
“It’s about curation,” Cook adds. “Well-made, well-priced, beautifully presented product sells. People will question how we transition [the approach at Watford] to multiple stores, but really this is a visual merchandising job – pulling together pieces and presenting them in a special way. Of course, not every store can be new, but good visual merchandising and not bleeding one brand into another is a really key part of what we’re trying to do.”
Another new addition to the Debenhams fashion team is womenswear director Sara Bradley, who joined in November last year, and has previously held roles at BHS, Sainsbury’s, Marks & Spencer and Arcadia Group.
“We’ve been differentiating the brands and really making sure each has its own identity,” she said. “It is about taking the key trends for the season and making sure there are different interpretations [in the offer]. So if you take animal print, for example, we have a Principles snakeskin dress, but you’ll also see animal done in bright colours with lots of metal work at Julien Macdonald, because that is right for the handwriting of that brand.”
Light, bright and modern, Debenhams’ new Watford store is certainly a step in the right direction. The retailer’s strategic focus on new product and in-store experience is a sensible approach, particularly if clearer handwriting reinvigorates its own-brand offer and gives shoppers a new reason to purchase from Debenhams’ designer roster.
However, a looming shadow is cast over Bucher’s plans, in the shape of fellow department store John Lewis, which is also dialling up its focus on experience and is focused on building a strong own-brand offer. Moreover, currently down but not out is House of Fraser, under new owner Mike Ashley. The Sports Direct boss has pledged to transform the ailing retailer into the “Harrods of the high street” by adding “cool brands of the moment”. With competition for consumer spend fiercer than ever, product and service will be key in the ongoing battle of the department stores.