Empty beauty counters, acres of discount sportswear and stores in need of repair. One year after Sports Direct bought House of Fraserout of administration, many of the shops now have entire floors that look more like branches of Mike Ashley’s pile-it-high sportswear outlets than an upmarket department store.
When Ashley bought the chain for £90m in the wake of its collapse in August last year, he outlined a plan to create the “Harrods of the high street” and expected to keep about 47 of the 59 stores open. Last month he admitted the chain was losing more than £1m a week, said he expected to close more stores in the year ahead and conceded that its problems were “nothing short of terminal”.
The chain now has 53 branches, and there are plans to turn at least five into “Frasers” – a more upmarket department store akin to the Flannels designerwear chain, also owned by Ashley. Sites in Belfast, Bluewater in Kent and Meadowhall in Sheffield as well as the existing Frasers in Glasgow are all tagged for conversion.
House of Fraser’s struggles mirror those of the wider high street. A net 2,481 stores disappeared from Britain’s biggest high streets last year – a rate of 16 closures a day – and at least 75,000 retail jobs have been lost since early 2018.
Department stores are key fixtures in the retail environment. They are often the cornerstone of high streets and shopping malls, accounting for tens of thousands of jobs and large amounts of floor space. If the British high street is to survive, the likes of House of Fraser need to succeed.
But further closures are now on the way at House of Fraser, and many will leave gaping holes in local high streets. Hull closed earlier this month, Altrincham and Lakeside, Thurrock, are expected to be redeveloped and four or five more are expected to pull down the shutters once Christmas is out of the way. As many as 20 more could go in the following 18 months as Ashley scrambles to carve out a profitable business. Two sites likely to be on the closure list are Camberley and Epsom in Surrey. When the Observer visited last week, both seemed to be braced for the worst. In Camberley one escalator is broken, and yellow and black hazard tape decorates the floor.
The beauty hall is depleted, with several counters empty. Perfume stocks are running low, with some major brands, including Chanel and John Paul Gaultier, unavailable. The Clarins counter is unstaffed and an assistant apologises for the lack of stock available on the Guerlain stand.
About half of the top floor, where the furniture and carpets departments used to be, is filled with discounted men’s sportswear. Racks of Lonsdale tracksuit bottoms, Karrimor outdoor wear and SoulCal jackets – all brands owned by Sports Direct – sit alongside Lee Cooper jeans and Pierre Cardin tops, some carrying Sports Direct’s gaudy Mega Value discount price tags. There is more discount sportswear downstairs on the womenswear floor, filling spaces which used to be home to brands including House of Fraser’s now discontinued own labels Therapy, Maison de Nimes and Linea.
Sir Philip Green’s Arcadia – the owner of Miss Selfridge, Topshop, Dorothy Perkins and Wallis – has pulled its brands from House of Fraser’s online store and moved out of a third of its concessions. These brands were once major suppliers to House of Fraser – and were owed more than £1m when the chain collapsed a year ago. In Epsom, where the store could close after Christmas, it is a similar story. There are empty beauty counters and acres of sportswear filling spaces once used by former House of Fraser own labels and brands including Jacques Vert and Eastex.
“It’s going to close isn’t it?” says Sylvia Hewes, a shopper in the aptly named Ashley Centre in Epsom, where House of Fraser is a tenant. “I still like it – they always have handbag bargains. They recently told us they are not allowed to order new stock when we brought back a shirt that was the wrong size. It will definitely disappear. It’s a shame, as it will ruin Epsom.”
Like many landlords across the country, those in Epsom and Camberley are already considering their options for new tenants or redevelopment.
Camberley is still struggling to adapt after the 2016 closure of its BHS – the upper floors of which are currently being turned into flats. Shopping centre The Square – where the House of Fraser store is a tenant – is owned by the local Surrey Heath borough council.
Kevin White, a partner at property consultancy Montagu Evans, which advises the council, says the local authority would like to keep the store, but is also considering alternative uses of the site. “We want House of Fraser to have a sustainable future in Camberley,” he says. “It has been an important part of the town for a long time and supports many people’s employment.
“We also need to think about the town centre’s long-term purpose though, and are reviewing the opportunities to get best value from the retail spaces, including alternative uses that will sustain economic growth and development.” Ashley’s vision for the future of House of Fraser includes, it seems, plenty of his own labels, where he can be sure of supplies, and higher profits. It’s a formula that worked well for Sports Direct, helping it wipe out many competitors, including JJB.
It’s no surprise, then, that Sports Direct last week bought out of administration upmarket Jack Wills – a business which already has concessions in House of Fraser. Owning such brands is protection against sudden changes, such as the planned closure of dozens of Karen Millen and Coast concessions after those brands also went bust. (They were bought out of administration by online fashion group Boohoo.com last week.)
Brand owners say they are happy that House of Fraser now pays on time and more quickly, and are prepared to give the company time to turn things around.
But Sofie Willmott at retail consultancy GlobalData says House of Fraser stores are now generally quieter, as shoppers have lost trust in the brand following widespread reports about its financial difficulties. “There is no reason to get branded products from House of Fraser. You can get them elsewhere and feel more comfortable that you can return them or get your money back if you need them.”
Floors of cheap sportswear also sit at odds with the more upmarket brands House of Fraser has retained so far, such as Ralph Lauren, Tommy Hilfiger, Ted Baker, Whistles, Phase Eight and Mint Velvet.
Richard Hyman, the veteran retail analyst, says: “However devalued the House of Fraser brand had become, it has been devalued significantly further. It’s difficult to carry aspirational brands next to functional un-aspirational brands.
“I find it hard to believe there will be even 20 House of Frasers. It may happen in stages but in three years, my bet is there will be under 10.”