Mike Ashley reportedly interested in buying the entire portfolio of Arcadia brands.
He could probably buy the whole entity from the administrators, strip the brand names out and simply close the majority of the stores.
The brands he wants will then consolidated into HoF store and cherry picked locations as multi brand stores. The brands he doesn’t want will be pigeon holed to prevent any other entity acquiring them.
Whatever the outcome it is going to be a vicious blow to the high street and thousands of jobs.
TBH I think Covid has accelerated the inevitable. It won’t be long before Ashley heads the same way. The way of the future is pure Direct to Customer (D2C).
A friend of ours was until recently the marketing director of long-established Aussie swimwear retailer, which went bust a few months ago. I saw her present at a digital marketing conference, where she described the challenges of running a hybrid business. In their case, they had their own shops (over 200) in high value locations, their clothes were also stocked in the two major department store chains and they had their own e-commerce shop.
If they discounted a product on their website, then they’d get a call from David Jones (department store) demanding the same discount of the cost price. Running a hybrid model meant that the needed a much larger and more complex pick and pack operation, one capable of processing online shopping returns, but also servicing bulk deliveries.
There was significant inertia in setting up promotions in their shops, which cost them the advantages in agility that e-commerce offers. Get a product trending online or in store and you want to exploit the trend, but if you’ve got to wait until your shops can do so, the trend has gone. Zara have invested heavily in this, to the point that they can get a product trending, scale up manufacture and pump it to where it is selling best. Old style businesses like Arcadia are way behind the technical drag curve here and are suffering as a result.
Just a couple of examples of a very challenging business model. Within ten years, it will all be online.