Struggling department store chain Debenhams’ announcement that it is proposing to close 22 of its 166 stores in 2020, with plans to eventually close around 50 stores will have a major impact on high streets and consumer shopping habits. However, in a highly competitive market, this move provides a welcome opportunity for its rivals and they must invest in local stores to maximise potential sales gains.
Debenhams’ store closures
Debenhams’ proposed company voluntary arrangement (CVA) is a necessary step, but one which will have a huge impact on local areas and shoppers. While the department store simply cannot continue to operate unprofitably and must focus on reviving its business, regular shoppers will no doubt be disappointed by the closures.
Though Debenhams’ womenswear market share has fallen by 0.6 percentage points over the last five years, our research suggests it remains popular and is ranked fifth in our clothing survey when shoppers were asked where they do most of their womenswear shopping. Our research also shows it has the greatest appeal amongst womenswear shoppers aged 45-54 and 65 and over, with these customers affected the most by store closures. While they have the option to shop online, older shoppers often have more time available to visit stores, preferring to browse touch and feel items before making a purchase.
Other retailers shopped by Debenhams womenswear shoppers %
Source: GlobalData’s UK Clothing 2019 survey of 5,000 respondents
Competitors local to the areas in which Debenhams is closing stores, have a huge opportunity to gain market share and must invest in ranges and stores to maximise sales opportunities.
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Marks & Spencer, in particular, is shopped at by 41.1% of Debenhams’ womenswear shoppers and with stores in many of the locations where Debenhams has already announced it is closing, it has the potential to gain shoppers, particularly if it continues to improve and invest in design and value.
While Primark also stands to benefit from Debenhams store closures, we expect that many of Debenhams more mature womenswear shoppers will favour Next, given its more classic womenswear offer. With both Next and Marks & Spencer’s desperately needing to drive additional store footfall, Debenhams’ store closures will be welcome news.