Editors Note: This article has been updated with a new quote from Retail expert Dr Gordon Fletcher of the University of Salford Business School
Online fashion retailer, Boohoo has purchased the struggling retailer, Debenhams, in a £55 million-worth deal.
As previously reported, Debenhams was the subject of a bid from the Fraser Group, however, a price could not be agreed between the two parties.
Today’s news will see Boohoo close all Debenhams stores and shift the focus to an online-only business in 2022. An estimated 12,000 jobs will be lost across Debenhams’ 143 stores as a result of the deal.
Retail expert Dr Gordon Fletcher of the University of Salford Business School comments: “As the online fashion retailers begin to buy up the pieces of Debenhams and circle the failed Arcadia group’s iconic brands a very clear message is being broadcast. Brands are still important. Brands have credibility and reputation.
“Consumers have strong emotional connections with brands. However, the importance of the bricks and mortar traditionally associated with retail brands has now fully waned. This is not a new realisation that has only been discovered during the pandemic. However, the current lockdown situation has forced us to cut the final ties between our favourite brands and the physical high street.
“Bricks and mortar are important but after the lockdown the brands that we will see will be very different. These will be the brands that bring peak experience and engagement – maximising the value of face-to-face contact – and they will not be fashion retailers.”
In addition to the Debenhams purchase, fellow online fashion group, ASOS today confirmed that they’re in talks to buy some of the Arcadia brand, including TopShop.
As 2021 continues to bring more bad news for the UK high street and physical retail, Commercial People has spoken with the CEO of DownYourHighStreet.com, Daniel Whytock, to learn what this major acquisition means for the consumer.
Commenting on the multi-million-pound deal, Daniel said: “Consumer choice and jobs will be [the] most severely impacted by these changes. However, independent shops will have the opportunity to prosper as consumers look for alternatives to the household names that have been acquired and taken online.
“I predict that within five years, we will see High Streets offering a more unique experience. Independent retailers will thrive as they are small enough to adapt quickly to changes, and with these large brands leaving the High Street, smaller retailer will be the ones offering consumers a place to shop in person – where they can talk to someone, feel and see the goods they want to purchase, and know that returns can be processed quickly and easily if needed.
“Also, shopping is, for many, a social activity. So once the restrictions are lifted, many people will be looking for that in-person experience to complement their online shopping.
“The Debenhams department store was founded in the 1700s, one of the first-ever to exist, so this is a very sad loss for the High Street. A department store, by definition, offers a variety of consumer goods in different areas of the store; each department focused on a different category. This is very much like an e-commerce store, although e-commerce offers you everything you need within a few seconds without the need to walk around. Debenhams becoming part of an online marketplace is somewhat inevitable.
“Even with the rise of e-commerce, consumers wanting their shopping the very next day and at the best price, let’s not forget that human beings naturally desire physical experiences and the retailers that offer the best experience will prosper on the high street in years to come.”
DownYourHighStreet.com is a free to join, low commission online marketplace on a mission to create ‘the world’s longest high street’. As a website, the platform hosts thousands of products that were previously unavailable online, from hundreds of independent retailers, allowing smaller sellers to create an online presence without the associated overheads.