HoF has been a prime candidate for a CVA for more than 20 years. Back in the mid 1990s, the company had at least 20 stores it needed to close. Here in 2018, word is that 20 are likely to be shut in this process. After all these years, is 20 likely to be enough?
The business has been struggling for many years. The list of its issues is very long. Too many stores and an offer that has never been sufficiently different are near the top. For years, the company has seen itself as the alternative to Selfridges. The problem is that this perception has never been shared by customers, or not enough.
It’s fashion brands are generally too second division to match the excitement and exclusivity that makes Selfridges such a magnate. And HoF has failed to develop strong enough private labels to give it a clear point of difference. Some legacy stores in poor locations can be dealt with via the CVA. But a revolving door at the top speaks volumes. Most of its leadership team has changed in the past 18 months or so.
Its weak offer makes attracting footfall very difficult and the business has unsustainably low sales per foot. This is a market where every man and his dog will look at lowering costs – this is a given. The survivors will be those who can increase sales. And in a flat market, that means capturing them from rivals.
Addressing the weaknesses of the company require very deep pockets. Massive investments in top people and the development of genuinely credible private labels are essential in order to then attract the top 3rd party brands that will drive footfall. The kind of root and branch restructure needs much deeper pockets and retail skills. Assuming this goes through, we’ll find out just how much genuine belief the new majority shareholders have in this business. Simply shutting some stores doesn’t address the key issues.
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