House of Fraser, the flagship department store owned by Mike Ashley’s retail consortium, could be changing the way it operates, with larger stores closing and new smaller sites partnering with the group’s other brands, reports from the Telegraph revealed.
Ashley’s Frasers Group PLC (LSE:FRAS), which also owns retailers Sports Direct and Flannels, is considering bringing a new approach to the department store and has even planned for the eventual disappearance of the brand.
Michael Murray, the son-in-law of Mike Ashley and Frasers Group’s current chief executive officer, noted in an interview that he is the one driving the changes at the company, and while he still receives advice from his 59-year-old father-in-law, he said Ashley is no longer making the decisions.
“House of Fraser was a broken business when we bought it. We’ve completely changed the operating model. It was mostly concession, the stores were way too big, they were under-invested,” Murray revealed.
“Our future vision is that House of Fraser will diminish and Frasers will grow.”
As part of the rebrand, Murray is considering filling the stores with Frasers’ other brands like Game, luxury fashion store Flannels or even Sports Direct, with the group having also built up stakes in e-commerce businesses like ASOS PLC (LSE:ASC), Boohoo Group PLC (AIM:BOO) and AO World PLC (LSE:AO.) in recent months.
Murray refused to explain what the purpose of these investments was because they were “mid-flight”, but the prospect of bringing ASOS or Boohoo to in-person stores would likely cause ripples throughout the UK retail industry.
“Most department stores could broadly take the same turnover out of half the space,” the Frasers boss added, pointing out how traditionally department stores have suffered from stocking products just to fill the space, rather than what the business actually wants to sell.
Since Mike Ashley pulled House of Fraser from administration in 2018, over 20 of the stores have been shut down, but under Murray's plans, within the last year, eight of the smaller sites have been opened.