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Closure of stores will be a huge loss

The impending loss of more than 30 House of Fraser stores will come as an undoubted blow to our increasingly brittle retail sector.

Thousands of jobs will go when the stores – including Rackhams in Altrincham - close their doors in the new year.

And coming hot on the heels of similar closures at big-name firms like Maplin, Poundworld, Toys ‘R Us, to name just a few, it begs the question – who’s going to be next, and can anything be done to stop it?

House of Fraser, which has some of the most expensive, prime retail spots in towns and cities across the country, says it simply ‘does not have a viable future’ without cutting 31 bases, and shedding around 6,000 jobs.

The news sounded the final death-knell to the already dwindling hopes of seeing the company move in as an anchor retailer to the new retail Northgate development in Chester city centre.

Council leader Samantha Dixon said: "It is obviously disappointing that House of Fraser's financial problems have led to one of our tenants to change their decision to be part of the Chester Northgate scheme.

"Whilst we remain committed to regenerating the Northgate area of the city and to delivering a high quality scheme, clearly we will reflect on the impact of this announcement.

“We will continue to keep the mix and phasing of the scheme under review and continue to engage with interested parties as we have done all along.

"The Council's planning permission provides the flexibility for us to make changes in reaction to changes in the market in line with our prudent approach to development.

“The retail element of the scheme is scheduled to be delivered in the second phase of the development and so House of Fraser's decision at this point does not fundamentally undermine our ambition to see the comprehensive redevelopment of this vital part of the city."

The company’s roots can be traced back to 1849, but there has been no room for heritage in the announcement - even the company’s flagship store on Oxford Street in London is to be axed.

House of Fraser’s chairman Frank Slevin said: "The retail industry is undergoing fundamental change and House of Fraser urgently needs to adapt to this fast-changing landscape in order to give it a future and allow it to thrive.

"Our legacy store estate has created an unsustainable cost base, which without restructuring, presents an existential threat to the business.”

Doom-mongers who predict a domino-style collapse on the high street with many other big names following suit may be a little premature, though.

The likes of House of Fraser sit in that tricky ‘middle market’ and are reliant on selling brands which are also available elsewhere.

Next, another chain which is in that middle band, described the past 12 months as the most challenging in a quarter of a century.

These stores are always going to be the most vulnerable in today’s online-heavy times, where a growing number of those who physically visit stores are on the hunt for a bargain.

You only have to look at the success of retailers like Primark which has stolen market share off the likes of Marks & Spencer, and B&M Bargains which has largely stepped into the gap left by Woolworth’s, to see that.

As analysts say, it’s not just about opening a door any more and hoping people might buy.

You either have to be competing on price to create a first come, first served attitude, or you need to turn your store into a ‘destination’ where people will want to go to spend quality time with family and friends – where they can eat, drink and have fun, and not just turn up to make a purchase.

Otherwise, the likes of Amazon which is cleaning up right now with its rapid home delivery service and no big high street rental prices to pay, but huge warehouse operations in areas like Warrington, is always going to be one step ahead of the game.

 Pictured: Inside a House of Fraser store

http://www.thesmallmarketingcompany.co.uk

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