Mike Ashley delivered a damning verdict of the British high street when he faced MPs on Monday (3 December). He claimed that mainstream high streets were “already dead” and that department stores were stuck with “prehistoric rents” set before the internet, meaning that unless something drastic is done the British high street “won’t make 2030”.
Reflecting on his £90m acquisition of House of Fraser, the Sports Direct boss told MPs on the housing, communities and local government committee that the department store is in a “terrible state” and insisted he had never promised to keep all 59 stores open.
“What person could keep 59 stores open? It can’t be done,” Ashley stated.
When the chain collapsed into administration in August the Sports Direct CEO pledged to keep 23 locations open, however the future of many still hangs in the balance. Take House of Fraser on Manchester’s Deansgate, the fate of which was only saved on Friday (30 November) securing 568 jobs.
Ashley told MPs that landlords were beginning to realise that investment is needed to take the chain upmarket and achieve his vision of making House of Fraser the “Harrods of the high street”.
Landlords might be coming round to Ashley’s way of thinking, but imitating Harrods takes a lot more than just rent reductions. Like, say, a Christmas campaign.
House of Fraser is usually one of the big campaigns to look out for during the festive period, alongside John Lewis, Marks & Spencer and Debenhams. Last year the chain was all about “bringing the merry back to Christmas” (see below). However, this year House of Fraser is conspicuous by its absence.
Ashley may well argue that with the brand’s future in flux and staff losing their jobs it was a bad time to invest in a high-profile Christmas campaign. But then look at the rest of the retail landscape.
Debenhams plans to close significantly more stores nationwide than House of Fraser, with 50 of its 166 store portfolio slated for closure over the next three to five years, putting 4,000 jobs at risk according to BBC estimates.
Despite the gloom, Debehhams has come out fighting in the run up to Christmas with a nationwide brand refresh, the launch of a next generation store in Watford and an experiential festive campaign.
Acknowledging the current climate for high street retail, Debenhams’ managing director of beauty and marketing Richard Cristofoli told Marketing Week in November that he would not be able to look a colleague in the eye if he had spent millions on a “vanity project” ad. As a result the campaign is focused on maximising the return on investment.
At Marks & Spencer plans are afoot to close more than 100 UK stores by 2022, putting 1,660 jobs in jeopardy. Yet despite the store closures the retailer went live with an “unashamedly commercial” fashion and general merchandise campaign that ditched the classic blockbuster in favour of ads that appeal to busy families.
Ashley told MPs on Monday he’s not Father Christmas, but he’s starting to sound a lot like the Grinch.
When the advert was unveiled in November M&S director of marketing for clothing and home, Nathan Ansell, explained that this campaign was primarily focused on getting “customers out shopping, on to the high street and into our stores”.
Closures are also underway at babycare specialist Mothercare, which is three months ahead with its plan to shutter 60 stores by June 2019, risking an estimated 900 jobs. Yet despite the closures the retailer launched its first major ad campaign for a decade in November.
Aimed at starting “a new conversation” around what the brand stands for today, Mothercare is using the ‘First Step’ campaign to counteract what it described in its latest financial report as “negative brand coverage” received in connection with the company’s recent poor financial performance.
Then there’s New Look. Although it is in the process of closing 85 of its UK stores and questions remain over a further 13, the high street fashion retailer still went ahead with its autumn fashion campaign on YouTube and social, released in October.
Even John Lewis, which saw profits dive by 99% in September, has taken a more product focused push to complement its Elton John extravaganza of a festive campaign. The department store chain’s biggest ever Christmas product push features eight 10-second ads promoting partnerships with a host of brands from Dyson and Bose, to Lego and Apple.
Yes times are troubled on the high street, but by investing in Christmas campaigns House of Fraser’s rivals are showing a sense of positivity and belief in the long-term future of their businesses. The tone this year is, in many cases, less showy and more overtly commercial as brands need to make their campaigns work harder than ever before.
Yet rather than backing out of Christmas – or advertising in general – these retailers are embracing the opportunities afforded by the biggest shopping period in the UK calendar to stay top of mind with consumers.
It is probably worth acknowledging that Mike Ashley has a track record of skimping on advertising, having failed to invest in festive campaigns for either his Sports Direct or Flannels brands. Perhaps he doesn’t believe in the return on investment, but then if he wants to emulate Harrods it might be worth taking a leaf out of its book.
Sometimes you have to invest to create a sense of magic that leaves a lasting impression with consumers, the kind of magic that the high street in 2018 is sorely lacking.
The Knightsbridge department store describes its 2018 Fantastica Christmas windows display, unveiled on 8 November, as “the pinnacle of sensory storytelling”. While one window is dominated by a giant Christmas dinner with turkey and all the trimmings, another features a Dolce & Gabbana inspired ‘leftover fridge’.
Outside its London flagship Harrods erected an eight-metre Christmas tree adorned with more than 100 oversized gourmet delights and is supporting its no-expense-spared visual merchandising feast with an array of experiential activities running throughout November and December.
Sometimes you have to invest to create a sense of magic that leaves a lasting impression with consumers, the kind of magic that the high street in 2018 is sorely lacking. Of course time will tell whether the investment in Christmas campaigns by the likes of Debenhams and M&S has paid off, but at least by buying into the festive spirit they are giving themselves a fighting chance.
As Ashley told MPs on Monday he’s not Father Christmas, but he’s starting to sound a lot like the Grinch.