House of Fraser has been a beacon on the British high street for over 150 years. Starting life as a humble drapery shop in Glasgow, Scotland it steadily transformed into the third largest group of department stores in the UK, with 59 stores.
Founded by Hugh Fraser and James Arthur, the company was established in 1894, and was ambitious from the beginning. As the company persevered through the first and second world wars, the duo began acquiring several businesses in Scotland, developing the business into a much larger chain. Steady growth continued into the early 20th century, extending into England by the 1950’s.
House of Fraser was once the epitome of high street chain store, a jewel in the department store crown, so it’s no surprise that its demise is a blow to high streets up and down the nation, and will shake the confidence of smaller retailers.
House of Fraser is just one of the many big-name brands that have recently fallen to the mercy of Britain’s high street woes – in recent weeks Mothercare, Marks and Spencer and New Look have announced closures or huge restructures in a desperate bid to remain solvent and curb losses.
So, is it time to accept that the high street really is dead?
Not by any means.
In fact, we are confident this offers SME’s operating within the retail sector an abundance of opportunity.
We are optimistic for the future of the retail industry, with some of our clients in this sector recording some of their highest profit margins ever. Similarly in the SME sector, we recently completed an award-winning deal for Nottingham based specialist coffee company, 200 Degrees, who received £3m funding from private equity investor Foresight Group, highlighting investors’ enthusiasm for small businesses, who offer their consumers something different from the generic coffee shop chain.
But these success stories are not without determination. It is anticipated that there will be a squeeze on the retail industry next year, therefore meaning it’s more important than ever that businesses adapt to changing consumer habits, and really listen to what people want.
Many outlets blame the economic slowdown for the decline of many such brands, but we believe there is much more to this. Online competition and saturated market places meaning retailers must offer their customers something more – something different.
Undeniably that has been a migration to online buying, but consumers are now looking to spend their money on experiences as well, not just physical items. Monitoring, addressing and implementing change early on is key to success.
Similarly, though, it’s imperative that early warning signs of a business in distress are admitted and addressed, rather than brushed under the carpet. Here at Smith Cooper, we firmly encourage businesses to seek professional advice early, as to assure the most successful outcome possible.
Smith Cooper is ultimately dedicated to helping your business succeed, and we understand that financial pressures present themselves in many ways. Our fundamental belief is that prevention is better than cure when it comes to distress signs, all of which is explained in our Restructuring and Insolvency guide.
We can offer a range of solutions and options for business, whether you are seeking growth & development capital, or acquisition opportunities, or would like advice regarding restructuring or stabilisation, please get in touch.