CHANGE can be good – great even – but it always come with risks. For months now Debenhams’ flagship Oxford Street store has been covered in scaffolding, with shoppers pointed towards a temporary entrance before being directed into a store that looks more like a building site than a shopping haven.
All signs point to the finished product being impressive – with its shimmery silver facade, plus three new restaurants to keep customers well-fed as they browse its range of designer collaborations.
But in the meantime, chief executive Michael Sharp is paying for his vision. Not including the disruption to the store’s trading, the £25m cost of the refurbishment has already dented profits to the tune of £2m. And despite its best efforts to signpost the store and keep customers spending, at the moment it’s not a pleasant place to be – it’s no wonder they’ve felt the effects of falling footfall keenly.
But there’s light at the end of the tunnel. The 19 modernisations that Debenhams has planned are not limited to London and many have already been completed, with positive results. New stores in Chesterfield and Lichfield are doing well, and the effects are wider than the high street – Sharp said yesterday that online sales in the area surrounding Chesterfield had doubled since the store opened.
Debenhams may be surprisingly downbeat about the prospect of an economic recovery, but that’s not unusual among retailers, who are more dependent than most on discretionary spending.
In the meantime, investors should hold on. Since he stepped into the top job at the end of 2011 Sharp has made a slew of positive changes – it’s a work in progress, but one that going in the right direction.