House of Fraser is to convert some of its stores to a discount concept called House of Fraser Outlet to maximise sales across the business and cash in on the discount boom.
The first House of Fraser Outlet will launch at the end of November in Swindon, Wiltshire. A further three stores in the business’s existing portfolio are likely to be converted to the outlet concept at a later date.
House of Fraser chairman Don McCarthy said the outlet concept presented an opportunity to boost sales across the entire House of Fraser property portfolio. The department store chain has been repositioning itself upmarket for the past 12 months but some of its stores are in locations without an appropriate consumer profile for top-end brands.
McCarthy told Drapers: “There was always a tail to the retail estate. Swindon doesn’t necessarily fit into our premium positioning plans. We may end up with four House of
Fraser Outlets. It is a good opportunity to clear residual merchandise and we can convert borderline stores into something that will make more money.”
McCarthy added: “This also gives us the chance to get the core business trading more prime.”
Between 60% and 70% of House of Fraser Outlet stock will come from their core chain. The business will also buy in terminal stock from brands and special make up product tailored to the local markets. The Swindon store will be reconfigured to cope with the strategy switch.
A source close to House of Fraser said the House of Fraser Outlet concept would target more premium brands than discount chain TK Maxx.
The discount sector has been booming since the economic slowdown as shoppers hunt out the quality associated with brands while still looking for bargain prices.
Several discount etail concepts have launched this year, including Asos Red and Vente-Privee, while womenswear etailer Net-a-Porter is also planning to launch a discount concept called The Outnet.
Meanwhile, discount chain TK Maxx has outperformed the full-price retail sector. Its like-for—like sales for the quarter ended July 26 rose by 5%.