House of Fraser: What went wrong?

18/06/18

House of Fraser is in danger of becoming the latest high street casualty, but what went wrong for the retailer?

House of Fraser (HoF) recently announced that it is closing more than half of its stores as part of a CVA agreement reached with its creditors.

Here we look at the reasons why this formerly renowned brand has fallen to such a low point and how the retailer could learn from its rival John Lewis.

As with many of these recent store failures, CVAs and the reduction in consumer spending due to the recession is getting the blame. In addition, long leases that were negotiated at the height of the ‘boom times’ for retail, before the recession, are now a millstone around the neck of companies such as House of Fraser.

According to many reports, the owners of HoF have not invested in either the physical real estate or in the brand.  This means that HoF now doesn’t have the dominant, most attractive, retail design or space in many cities.  The example given in Drapers Online was that of Birmingham, where Harvey Nichols and John Lewis have opened retail stores recently. 

We put that theory to the test here in Leeds, where Harvey Nichols has been open for more than 20 years, and where John Lewis opened less than 2 years ago.

Clothing Brands

It isn’t possible to compare clothing brands between Harvey Nichols and the other two retailers, as Harvey Nichols stocks much more prestige, designer brands.  However, HoF and John Lewis have a very similar target market with many of the same clothing brands in store. 

In terms of visual merchandising and store design, we can see the difference between the two retailers in the Ted Baker store space (see imagery below) – firstly in John Lewis and then in HoF. The John Lewis visual merchandising is much simpler, looks more premium and is much easier to shop.

Image source: John Lewis store Leeds (left) - House of Fraser store Leeds (right)

Looking at the in-house brands, Linea was formerly known for being cutting-edge and different.  Looking in store recently the designs were ‘middle-of-the-road’ and the fabrics felt cheap.  Conversely the John Lewis in-house brands such as Kin and Modern Rarity regularly feature in fashion magazine spreads and are known for being design-led. In addition, John Lewis features brands previously only available online, such as Boden and Finery.

Beauty Brands

Here we can compare all 3 stores as all 3 of them carry the same brands.  These range from premium brands such as Clinique, Estee Lauder and Dior, to newer market entrants such as Charlotte Tilbury and edgier more youthful brands such as MAC and Urban Decay.

In all 3 stores the layouts and branding were very similar – it appears that the beauty brands are more able to develop their own retail presence, even in John Lewis.  The main difference was the feeling of space within the department – HoF felt more cramped and, certainly difficult to manoeuvre around, whereas Harvey Nichols and John Lewis felt more spacious and calm.

Just a small point, (but very important to shoppers), John Lewis was the only store where I was approached by an assistant in the beauty department to ask if I needed any help – in the other stores I was left to my own devices.

Signage

In a recent blog my Creative Director colleague, Jamie, wrote about the importance of signage and wayfinding in stores. Effective navigation focuses on getting people in and out of spaces to get what they need, but also curates the overall experience.  Here again we can see a difference in the way it’s done.  Both stores use high-level signage to indicate where brands are within the store, which are equally as easy to see. 

HoF uses the full brand image, including colour and font. This gives the individual brand precedence over HoF, but creates a busy and confusing effect. John Lewis takes a more muted approach, overlaying the brand’s font in monochrome onto their own display system. This therefore gives John Lewis more control over the ‘look and feel’ and emphasises the John Lewis story over and above the other brands, whilst creating a cohesive experience throughout the store.

Image source: House of Fraser Leeds (left) - John Lewis Leeds (right)

Website look and feel – spot the difference….

Next we looked at the websites for both retailers. Here’s the same Coast dress for sale on the two different websites.  As you can see, it is difficult to tell which store is which (HoF is the first one!) and  the user interface felt the same on both sites; it was easy to search by brand, the time to reach checkout was the same and, as can be seen, the price is exactly the same.

We understand that HoF’s issues stem from changing their algorithms so that they are no longer high up on Google searches – such a simple thing to get wrong but such an impact on sales.

House of Fraser of the Future

As we can see, when we look with a dispassionate, critical eye, there aren’t many insurmountable difficulties.  A couple of tweaks in House of Fraser, in terms of space, layout and signposting, could give the same visual impression as Harvey Nichols or John Lewis. 

But the sum of the parts can sometimes add up to more than the whole and, as shoppers, we’re not dispassionate; we’re passionate about what we want and we’re loyal to our favourite retailers and brands.  John Lewis has a great story to tell and their ‘Never Knowingly Undersold’ strapline is prominent at each entrance to the store, along with the statement that all of the staff that you will meet are also owners of the business.  Harvey Nichols knows its customer and plays to its strengths accordingly.

This is where House of Fraser is going wrong.  There is no brand story to create loyalty and HoF doesn’t seem clear on who their customer is. This is where they need to focus in the future, as well as making those tweaks to the physical stores and their website.

Author

Helen Thain

Finance Director

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