Where next for department stores?
As the dust around the collapse of Debenhams begins to settle, I’m struck that the countless questions I’ve fielded on this subject boil down to just two core issues:
What kind of a future do department stores have (if any)?
And what will happen to the millions of square feet of ex-department store space already on or about to be released onto the market?
Let’s get to grips with the first point: The original department store concept that was devised over a century ago has long since been commoditised to the point of ubiquity. But it was the more recent advent of omnichannel retailing and the resulting radical shift in consumer behaviours that really put paid to department stores as we’d come to know them.
It’s clear to me that their days as universal property anchors are largely over and that they will completely disappear from smaller towns (a coming Perspectives piece will examine what that means for the future of UK High Streets). However, rather than predicting the total demise of the department store, I’m anticipating a renaissance based on the fundamentals of the original concept, pioneered on a grand scale by the likes of Selfridges, Harrods and Galleries Lafayette.
The extravagant architecture of those early stores reflected the exclusive nature of a luxurious shopping experience, founded in a distinctive, wide-ranging product offer, complemented by excellent service from staff with genuine product knowledge. And it is exactly these qualities which will be key to the successful trading of what will eventually become a limited number of flagship department stores, located only in major city centres.
That leads us on to the second point of how millions of square feet of ex-department store space will be absorbed: I’m most optimistic for larger towns and primary shopping centres, where strong locations mean that mixed uses on upper floors, supported by ground floor unit shops, are likely to fill vacant space relatively quickly. We are already seeing this happen with the arrival of specialist beauty destinations and new concept leisure venues. This process of change itself raises some interesting questions, such as where former department store shoppers will go. We should also be aware of the latest US trends, as these so often filter through to the UK market, such as the recent wholesale conversion of some former Macy’s stores into fulfilment centres for online retail. The city centre location of many former department stores in the UK could make some ideally placed for last mile delivery hubs (subject to planning).
In smaller towns and secondary shopping centres the challenge of transforming former department store space is admittedly greater, not least because the collapse of brands like Arcadia, Edinburgh Woollen Mill and Bonmarché, has made reletting retail space hugely more difficult. In these locations the spectre of BHS, which left large amounts of space vacant for considerable periods, still looms large. Even here, though, there will almost certainly be opportunities, though more comprehensive redevelopment, possibly including demolition of obsolescent buildings and creation of new public spaces, is likely to be required.
So rather than being glum about the loss of some department stores which had frankly soldiered on well past their sell-by date, I’m actually really excited about the resulting potential to create new types of places and spaces. The P-THREE mantra of local relevance is key – a cookie-cutter approach definitely won’t work. In smaller towns, in particular, landowners (many of which are local authorities) will need to be bold, have vision and be pro-active in engaging with their local communities to move away from an outdated retail-led hegemony. For these landowners, shuttered department store aisles could well become a cornucopia of space for innovative future uses.
Article by Hannah McNamara, Co-founder of P-THREE
Photo credit: Selfridges
