‘Department store leadership merry-go-round shows a sector adapting to change’

Department stores’ revolving doors have been spinning fast this week as chief executives change.

At eight-store Fenwick, the biggest remaining family-owned department store business, John Edgar is leaving after almost five years in charge – other senior managers are also off.

He’s succeeded by Nigel Blow, one of the most experienced people in department stores who has held top positions at some of the biggest names including Dublin’s Arnotts and Brown Thomas, as well as Harrods.

At Selfridges, one of the world’s greatest department stores, Andrew Keith is moving on after four years. Group chief executive André Maeder will take on Keith’s UK duties.

The leadership changes follow those at John Lewis, to which Peter Ruis returned earlier this year to drive the business forward following a difficult period.

Unique propositions

Such a level of change sometimes indicates companies or sectors in trouble, desperately seeking a saviour. But that doesn’t look like the case this time – even though challenges remain.

Fenwick, for instance, returned to the black in its most recently reported year, helped by the sale of its London Bond Street shop in order to reinvest, including in its Newcastle flagship. While the private retailer’s latest performance is unknown, it is understood that current trading is pretty much where it was expected to be.

Selfridges, hit by the effect of Covid and its aftermath on Oxford Street, the tourist tax and uncertainty last year after problems at former co-owner Signa, nevertheless exerts unique appeal – exemplified currently by its Sportopia spectacular including the chance to climb a replica of one of its famous fascia columns.

“If a shopper bothers to make a trip to a department store, it’s got to be worth their time”

At John Lewis, there are signs that the return of Ruis has improved morale and he is in the midst of focusing on some of the fundamental pillars of its appeal such as staff, service and appealing stores.

In some ways, the department store players are in a good position to play to their strengths if they execute well.

Each of the three department store groups has a distinct positioning. John Lewis is the only mass-market player with stores in most regions of the country. Selfridges, while now part of a group including De Bijenkorf in the Netherlands, is a one-off that draws shoppers from around the world to its unique proposition. Fenwick’s more upscale positioning versus John Lewis gives it a point of difference.

Omnichannel pazazz

A big opportunity, if they can take advantage of it, is the remarkable revival of bricks-and-mortar stores since the dark days of the pandemic.

The constant question, which must always be up for review in an age of online marketplaces and unparalleled choice, is what are department stores for? If a shopper bothers to make a trip to one, it’s got to be worth their time.

That may be service and advice excellence, which Ruis aims to restore. It may be a unique experience, such as offered by Harrods and Selfridges – a status which Fenwick, which is investing £40m in its Newcastle flagship, also has. That store can remain a true destination.

As my colleague Beth Bloomfield, senior retail analyst at Lumina Intelligence and compiler of our latest department store ranking, points out, one key metric must be the frequency of visits.

“Those leaving have contributed to change but the baton is now handed to the new arrivals”

If that number can be pushed up by John Lewis and Fenwick, it will be evidence of core appeal. They must also consider the extent to which they are drawing in new customers, and Fenwick’s playful tie-up with Greggs is one example of how perceptions can be changed.

All have omnichannel opportunities, too. Compared to the theatre of their bricks-and-mortar, department stores’ online offers pale in comparison.

Sure, someone might deliberately choose to shop on them, or they might pop up on a search. But they need to be more than that, especially when the platforms of others such as Marks & Spencer – which is also showing the way in-store with its impressive food halls – and Next already offer an increasing proportion of third-party product.

If a way could be found of giving department store websites more pazazz that mirrors the feeling that a store visit provides, the doors open to much more opportunity.

This week’s leadership merry-go-round shows a sector seeking to adapt to change − those leaving have contributed to that but the baton is now handed to the new arrivals. If it can adapt, the department store format, under so much pressure in recent years, can look forward to a healthier future.