Could Beales – or someone else – yet save Robbs?
If you read the Hexham Courant, you’ll have seen the extensive coverage in Friday’s paper of Robbs’ impending closure, following the announcement, by the administrators MCR, that the department store will close within four weeks. The Courant devoting three pages to the story is hardly surprising given Robbs’ status as the largest and most prominent store in Hexham town centre – its closure is big news, and is bound to deal a short-term blow to the town’s appeal as a retail destination.
As I appended to my blog post last week, Robbs is one of nine loss-making Vergo Retail stores already earmarked for closure, while a buyer is sought for the ten remaining shops. However, just as Robbs was saved with days to spare three years ago, so there remains hope that someone could again step in and rescue the store from the brink.
With that prospect of rescue – however faint – in mind, I was pleased to have a chat last week with the Courant’s Helen Compson, talking about what the future of Robb’s might look like. You can see Helen’s article, featuring my comments, here. So who, if anyone, might be in the frame to take over Robbs this time?
To be honest, there are few plausible candidates. As I suggested to Helen, independent department stores – the most likely suitors – have been on the wane for years, with many longstanding names closing down (Cardiff’s David Morgan, for instance) or being swallowed up by larger rivals (such as Beatties and Jenners by House of Fraser, Roomes by Morleys, and Williams & Griffin and Bentalls by Fenwick).
Of those indies that remain, many are individual department stores that are very much associated with a particular place (Atkinsons in Sheffield or Rutherfords in Morpeth, for example), or are small chains focused upon particular parts of the country – such as the six-strong Morleys group in London, which has reportedly already ruled itself out of acquiring any Vergo shops due to the poor geographical fit with its current portfolio.
There are, however, a handful of operators who could conceivably come to Robbs’ rescue.
Croydon-based department store Allders appears to be thriving following its 2005 purchase by Jaeger owner Harold Tillman – recent successes, for example, include attracting online lingerie retailer Figleaves to open its first physical outlet. Go back just a few years, however, and Allders was itself the victim of Vergo-style over-expansion, with the then 45-strong UK-wide chain collapsing into administration in 2005.
Today, the massive 319,000 sq ft Croydon store is the only one left trading under the Allders name, after Tillman bought up both the Allders brand and the lease on the Croydon premises. Of the remaining Allders sites, many were bought up by Bhs, Primark and Debenhams.
Since Allders’ resurrection, rumours of a renewed expansion for the business have persisted, with Tillman mentioned as a possible suitor for both Robbs and Joplings (in Sunderland) last time those stores went into administration in 2007. No indication of Allders’ interest has yet emerged this time, however; indeed, Joplings and Derrys (in Plymouth) would be more likely targets than Robbs if Allders were to once again seek the flagship, city centre sites that characterised its previous incarnation.
If anyone’s going to snap up Robbs, Bournemouth-based Beales is surely the hot favourite, with several factors in its favour:
- Location: with its portfolio stretching from Poole in Dorset to Kendal in Cumbria, there is a geographical logic to Beales taking over a store in neighbouring Northumberland.
- Demographic: Beales’ locations, ranges and concessions see it targeting a similar market to Robbs – with the ‘grey pound’ prominent – though its recent move into ecommerce and investment in men’s young fashion has demonstrated the chain’s determination to modernise its image and widen its appeal.
- Store type: Beales tends not to compete with the big department store chains in large city centre locations, but is more usually found as the anchor store in slightly smaller towns and cities – very similar to Robbs’ status within Hexham.
Perhaps most importantly, Beales unusually finds itself in a healthier position now than it was in 2007. After snapping up several unwanted Bentalls stores from Fenwick in 2002 and a former Allders site in Horsham in 2006, Beales was seen as “underperforming” at the point when Robbs was last on the market, with one analyst rather bluntly claiming that “[It is] going nowhere without a bid and [there is] no sign of one at present”. In May 2007, just as Robbs was being ‘saved’, Beales was announcing its second profit warning in three months (suggesting that no interim dividend would be paid), and was gearing up to close its department store in Ealing.
Fast forward three years and, reinvigorated under the leadership of ex-Bhs man Tony Brown, things look much more promising for Beales. Only last month, it opened its first new store in four years, a 14,000 sq ft shop in Fareham, Hampshire under a new ‘Beales for Men’ fascia, while the retailer must surely have benefited from its tie-up with George Davies’ new venture, GIVe. Crucially, Beales has also made clear in recent months that it’s interested in acquisitions, with fashion industry journal Drapers also querying in the last few days whether this might materialise into an interest in selected Vergo stores:
Indie department store chain Beales is likely to keep a close eye on the administration process. Beales is on the acquisition trail after shareholder and property entrepreneur Andrew Perloff upped his stake in the 11-store chain to 29.7% in February. The group is believed to be interested in leasehold opportunities, pushing it to the front of the pack of potential interested parties. Beales chief executive Tony Brown said only that the business was looking to expand.
Additionally, the Drapers article suggests that possible suitors may find Robbs one of the more attractive stores within the Vergo portfolio, quoting an unnamed retail source who told the magazine that “a potential buyer could return Robbs of Hexham or Derrys in Plymouth to profitability with the right landlord deal and a store revamp”.
That landlord deal point is, of course, absolutely key, given that the Robbs premises are owned by Buccleuch Group, rather than by Vergo Retail itself, and that Buccleuch’s redevelopment plans for the site are still simmering in the background. Against this backdrop, any potential purchaser of the Robbs business will surely demand assurances regarding the store’s ability to continue trading, in the long term, from that site, with or without whatever redevelopment might take place.
One name I didn’t mention in my interview with Helen is David Thompson, Vergo Retail’s owner. Having taken Robbs into administration (as part of Owen Owen) and then bought it out again (as Vergo Retail) three years ago, there would be nothing to stop Thompson doing the same this time – just as former MK One business partner Elaine McPherson has done with Ethel Austin, taking the business into and out of administration in both 2008 and 2010.
Frankly, however, this prospect must be a non-starter, particularly after what the Courant says are Thompson’s recent assurances that Robbs was “thriving” – something of a contrast to MCR’s statement last week that Vergo “could not continue to trade in the short term without implementing immediate cost saving measures”. True, as the only option on the table in 2007, Thompson’s last-minute rescue of the store gave Robbs a welcome stay of execution, and hope – now dashed – that he was after all the right man to build a viable future for the business.
This time – if Robbs is to be worth saving at all – staff, concession holders, suppliers and customers will surely demand new ideas, and proper investment. Time is running out, however, to find out whether those new ideas might come from Beales, Allders, or someone else entirely.
Thank you to Dr Neil Clifton for the use of the photograph of Allders, and David Lally for the shot of Beales. The photographs are © Copyright Neil Clifton and © Copyright David Lally respectively, and both licensed for re-use under the Creative Commons Licence.