Selfridges is to pump up to £40m into refurbishing its Manchester Exchange store next year after the iconic department store group said it would beat the downturn to smash the £100m profit barrier this year – which marks its 100th birthday.
Selfridges chief executive Paul Kelly said group revenue would be up by “high single digits” for the current year against sales of £809m last year. He added that its regional stores in Manchester and Birmingham had performed well, “showing that this [performance] was not just about tourists visiting the London store or the weak pound but about strong local sales growth”.
Kelly said complete refurbishment of the Manchester Exchange store in the city’s centre would begin next year, once planning permissions had been granted, and that work would last for several years and cost in the region of £30m to £40m.
“The redevelopment of the Manchester store will be a massive project and will be a major influence on the centre of the city,” said Kelly.
Plans for the refurbishment are likely to make some indies that trade in the city centre and stock similar brands nervous, but other indies said a refurbished Selfridges would help bring excitement and therefore more shoppers into the city, which would be a long-term benefit to anyone trading in Manchester.
Selfridges has also invested in developing its first transactional website, which will go live next spring, and it will open a 32,000 sq ft footwear department in its Oxford Street store in London next year.
Kelly added: “We are not in that many locations and so this [the web] gives us the opportunity to touch a lot more people. It has been two years in the making and is another multimillion pound investment that we have thought about carefully.”
He added: “We have already made a sizeable investment in the ecommerce site and it is going to take a lot of our focus in 2010 – it’s very much like opening a new store. We have looked at many aspects of what we want to offer and obviously it will be based around the big brands and complementing our own brand offer. It is impossible to recreate the buzz of visiting the stores but it will be an energetic site and we will do all we can to entertain.
“We have continued to invest in our stores and we will continue to do so. I think people make their decisions about where they want to shop and fortunately many people continue to like what we do at Selfridges.”
The women’s footwear department in the London store will grow by more than a third. It is scheduled to open in the second half of 2010. Kelly said the department would be “of a scale and execution that blows any other department store away”.
Paul Kelly on:
“We can only control the things that go on inside our store, so while we have had the VAT decrease, I think the drop really only had a psychological effect.”
“[The long-term fortunes of Selfridges will be based on] the breadth of our offer, from value to luxury, and on entertainment and buzz in store. There will be plenty more events in 2010 including some around the World Cup.”
Irish department store Brown Thomas (which Kelly also runs)
“The Republic of Ireland is a tough market at the moment but we have done a lot with the main Dublin store and are in the fortunate position of having no debt, so we can focus all our attention on trading.”