It is necessary to start this blog post by reflecting that underneath the news stories and headlines are real personal stories in which individuals are losing their jobs. Too often it is easy to focus on the store closure and ignore the human cost. We need to remember this, as it underpins both the retail stories discussed below.
It is hard to know what to say about the saga of Debenhams and the antipathy there seems to be between the various parties. At one level, given previous stories, it is hard to like Mike Ashley, but at least he is trying to put some money where his mouth is. Whether this is because he sees a retail or a property play is another matter. But in the case of Debenhams this is now moot, as he has been finally rebuffed. Though as I write seems determined to try to sue someone involved.
So, for now, Debenhams is in the hands of the lenders. Looking at the business it is hard to be positive. Buffeted by the changing consumer interests and behaviours, in large spaces hit by the excessive town centre rates charges, the business is in real difficulty. But considering the stores (and experiencing them) it is difficult to see their point of differentiation and the reasons for consumers to visit. Stories of in-store confusion and poor service abound. They have been losing their way for a while.
The current proposition seems to be to try to close some stores and rationalise the portfolio. There may be some benefit to be had on rents as well. But none of this really addresses the fundamental problem of the attractiveness to consumers. A smaller chain still faces the same problem. What are the plans to sort out the offer to customers? And can they be made affordable?
This week Tesco produced their latest figures and seem to be on track to come back fully from their problems. Dave Lewis has altered what the business does and refocused operations. Some of this has involved closing stores (and cutting plans for openings), reducing staff, planning to cut some counter services and simplifying operations. There is more to it than this of course, but the point to make is that slash and burn and simply cutting stores is not the answer on its own. Tesco still have a long way to go, and some of their initiatives will not work in all probability, but there is far more of a sense of trying to satisfy customers than is yet in evidence from Debenhams. It is a simple reminder that the business must run for the benefit of customers or they will go elsewhere.