Debenhams announced some devastating figures this week, attributing the 85% fall in bottom line pre-tax profits the fall to the final trading days of the period when bad weather forced the business to temporarily close around 100 stores.
This came as a hammer blow to investors and employees as 'only' a 50% fall was forecast was predicted
The retailer cited a “disappointing Christmas season” behind the fall in underlying earnings in the UK, which were down 39.3 per cent for the half year, according to an article in the Retail Gazette.
Carol Spencer who developed the personal shopping experience for Debenhams in the 90's told Wake Up to Money podcast when asked if the artic winds were to blame.
"I don't believe it (the beast from the east) would have an effect. A short term effect yes, but they were in trouble way before then. People want an emotional connection that you can't get online. Toys R Us have suffered. That massive warehouse effect of shopping is not want people want. That’s what a website is, a massive warehouse."
Carol has a point. We need to radically rethink the whole monolith department store model. People are needing an emotional attachment to everything now, we're even given virtual carte blanche to travel on planes with our dogs because we're such fragile snowflakes.
Though Debenhams are showing some signs of reimagining their bricks and mortar model. They may have been slow out of the blocks converting their catalogue to an online shopping experience, but they have made some small steps in consolidation of surplus floor space, their latest opening in Wolverhampton is much more compact and streamlined offering a more intimate customer experience.
But who is getting right? After all not every e-tailor is getting right neither as we highlighted in the demise of a A Suit That Fits. I asked E-Commerce manager for a multitude of companies and Editor of Maketh the Man, Anton Welcome about the future of retail and what brand is getting it right.
"In my opinion it's John Lewis from a department store point of view their values resonate through everything they do. Their website generates a lot of revenue they are growing a lot faster than competitors with a lot less store footage. They have 50 stores on their portfolio but they have an online business that will cater to their demand and it's a brand that will deliver products to stores that customers can get to. Best of both worlds, lovely balance."
And the future of retail?
"Look, speed is everything. Let's just say if Amazon had stores we'd be in trouble. They are a ruthless, scary evil. A necessary evil, but very scary how powerful they've become. It's always been survival of the fittest, you're not going to stop Amazon anytime soon. The whole beauty of competition is that you have to do it yourself and do it better than them."
In other news
Away from Debenhams shirt seller Charles Tyrwhitt has announced losses of £5.9 million on revenues of circa £200 million as an IT blunder saw the company hemorrhage £7.3 million. And most recently House of Fraser is expected to announce a CVA (company voluntary agreement) to avoid falling into administration.