Best Buy, Rotherham (3 Nov 2011)

Carphone Warehouse has this morning confirmed that it will close its 11 big-box Best Buy stores across the UK, subject to employee representative consultation, putting 1,100 jobs at risk.

The first store, in Thurrock, only opened – to great fanfare – in April last year, followed by others in Bristol, Croydon, Derby, Enfield, Hayes, Liverpool, Nottingham, Rotherham, Southampton and Wolverhampton.

However, the electronics and electricals chain – a joint venture between Carphone and the successful US retailer Best Buy – has racked up eye-watering losses in the subsequent eighteen months. Having made an operating loss of £62m in the year to 31 March 2011, the pace of those losses has worsened during 2011, with a further deficit of £47m reported in the six months to 30 September. Ambitions to build a 200-strong chain soon seemed wide of the mark, and the collapse, at the end of last year, of talks to open a store here in Gateshead (on the current Mothercare World site at Team Valley Retail World) suggested that any plans for growing beyond 11 sites had stalled.

Mothercare World - and once-mooted Best Buy site - at Team Valley, Gateshead (31 Dec 2010)

Clearly, Carphone decided it was better to pull the plug now than to persevere further, despite the fact that closing the stores will not be cheap – the retailer’s announcement anticipates “further operating losses of approximately £25m-£30m through to closure”, as well as “cash costs of closure [of] a further £65-75m post-tax” and “non-cash asset write downs [of] approximately £40m-£45m.”

Best Buy, Rotherham (3 Nov 2011)

So, what went wrong? Arguably, things got off to a bad start with the dithering that followed the initial Best Buy UK announcement in May 2008. Though the first Best Buy stores were originally planned for 2009, the eventual two-year build-up to market entry, in April 2010, allowed the UK’s established electronics and electricals players – notably Currys and PC World, owned by Dixons Retail, and to a lesser extent Kesa-owned Comet – to steal a march on the newcomer with significant investment in their own stores and branding.

Currys and PC World, Northumberland Street, Newcastle (6 Aug 2010)

Though Comet has itself struggled of late, Dixons’ transformation of PC World and Currys has been generally more successful, revamping the tired look of its brands, opening dual-branded stores and larger-footprint Currys Megastores, and seeking to transform perceptions of the business through innovations such as the design-led Black store in Birmingham. The pre-emptive responses of Best Buy’s competitors-to-be, coupled with other challenges within the electricals trading environment (growth of online retail, depressed consumer spending), meant that the market that Best Buy entered in 2010 was rather different to the one it had envisaged in 2008.

Currys PC World Black, Birmingham (19 Aug 2011)

Coincidentally, I visited my first Best Buy store, on Rotherham’s Parkgate Retail Park, last week, where the retailer has only been open since 10 June this year. At the time, I tweeted that “Best Buy in Rotherham is vast, beautiful, yet strangely sterile. Some customers, but seems quiet overall.” There’s no disputing that it was a good-looking store, but it was hard to work out why a customer might head there instead of to the more familiar – and recently opened – 52,000 sq ft Currys PC World megastore nearby.

Best Buy bus, Malmesbury (21 Sep 2011). Photograph by Mark Leaver

Best Buy’s UK fate is neatly encapsulated by the photo that Mark Leaver captured for me in September, where he spotted a Best Buy bus parked on a deserted roundabout near Malmesbury in Wiltshire, 30 miles from the nearest store at Bristol’s Cribbs Causeway.

Ultimately, through its own missteps and the changing climate around it, Best Buy has struggled to define its place in the market, or to find where its customers were. Malmesbury’s double decker may have shouted about the store’s presence, but sadly there just weren’t enough people who wanted to go along for the ride.

Clas Ohlson billboard, Gateshead (8 Aug 2011)

Everything seems to be gearing up nicely for the opening of Newcastle’s Clas Ohlson store, just two weeks today on Wednesday 24 August.

The Northumberland Street store’s hanging signage (below) has now been in place for a week or two, and there seems to be a big marketing push going on to build local awareness of the Clas Ohlson brand.

Hanging signage at new Clas Ohlson store, Newcastle (8 Aug 2011)

Out and about on Monday, I spotted at least two billboards (in Gateshead) and posters at various Metro stations, including Jarrow, below. Under the tagline “Prepare to have a new favourite shop”, the posters emphasise Clas Ohlson’s range of “practical products” as well as celebrating the retailer’s Scandinavian heritage.

Clas Ohlson poster on Metro (8 Aug 2011)

As a relatively new entrant to the UK market – Newcastle is its twelfth store – Clas Ohlson’s need to raise awareness and understanding of its brand mirrors the position of the US electronics giant, Best Buy, which currently has 11 UK sites.

When I’ve mentioned Clas Ohlson’s arrival to people I know here in the North East, most have never heard of the chain; however, with the nearest store currently in Leeds, that’s hardly surprising.

While the hoardings around the site have been prominently plugging the store’s imminent opening for the last couple of months, there’s clearly a job to do in telling Newcastle shoppers about what Clas Ohlson is – especially as the store’s lower-ground-floor location (previously occupied by Collectables) will make it more challenging than usual to attract unknowing people in off the street.

Best Buy recently began a nationwide TV campaign on the back of launching its transactional UK website late last year, and this activity has potential to drive multichannel traffic, encouraging visits to the online store, big-box locations or both.

Clas Ohlson website (10 Aug 2011)

Clas Ohlson, similarly, has been building up its physical store presence ahead of launching its online shop, which, according to its website, is set to go live early next year. Being able to reach customers anywhere in the UK will be a critical stage in Clas Ohlson’s penetration of the British market, and, like with Best Buy, will make it worthwhile marketing the brand at a national as well as a local level. The hope will be that traffic to the physical and online stores reinforces one another, as well as potentially paving the way for further high-street store openings through 2012 and 2013.

For now, Newcastle is set to be Clas Ohlson’s only UK store opening of 2011, but the launch of the online store in 2012 should ensure that shoppers elsewhere – be it Bristol, Southampton or Glasgow – are more clued up in advance should a Clas Ohlson eventually set up shop on their high street.

Habitat, Bristol (22 Feb 2011)

It’s hard to dispute that the last couple of weeks has been a torrid time for the UK high street, with a succession of well-known names either announcing bad news or collapsing into administration.

While HMV has a stay of execution for now, other retailers in that section of the alphabet – Habitat, HomeForm, Haldanes and TJ Hughes – have teetered, joined by others such as the clothing chains Jane Norman and Life & Style.

Thorntons, Bishop Auckland (24 Jan 2011)

Comet and Thorntons, meanwhile, look set to follow Mothercare’s recent lead in radically slimming down their UK store estates. When Thorntons becomes the most popular trending topic on Twitter, as it was earlier this week, you really know that the high street’s travails have entered mainstream discussion.

So, what are the key headlines from, arguably, the most intense period of bad retail news since a flurry of retailers – among them Woolworths, Zavvi, Whittard’s and Adams – all collapsed in the final weeks of 2008?

Habitat's Tottenham Court Road flagship - which is staying open (6 Apr 2011)

• The iconic furniture brand Habitat, and three of its central London stores, have been bought by Home Retail Group, owner of Argos and Homebase, for £24.5m. However, the remaining 30 UK stores are in administration and threatened with closure, with 750 jobs at risk. Harrogate, Edinburgh and York are among the locations affected, but there have been no Habitat stores in the North East since the Eldon Square branch in Newcastle closed in the late 1980s.

• HomeForm, the private equity-owned home improvement business that owns brands such as Moben, Kitchens Direct and Dolphin filed for administration on 23 June, putting 160 showrooms and 2,800 jobs in danger. Locations in the North East include Darlington, Gateshead, Middlesbrough, Newcastle and Sunderland.

• TJ Hughes, the Liverpool-based discount department store chain, collapsed into administration on Thursday morning, two days after announcing that it was planning to appoint administrators. The chain has 57 stores, which employ 4,000 people and account for almost 2 million square feet of retail floorspace – slightly more than the entire sales area of Metrocentre. TJ Hughes stores in Newcastle, Sunderland and Middlesbrough are among those at risk.

• Young fashion chain Jane Norman collapsed into administration earlier this week. On Tuesday, it was announced that Edinburgh Woollen Mill had bought 33 of the 94 shops, saving nearly 400 jobs, with a possibility of buying 28 more stores. However, the remaining 33 sites will close – including the branch in Newcastle’s Eldon Square – and the future of Jane Norman’s 82 department store concessions is uncertain.

• Clothing and homewares chain Life & Style – the rebadged Ethel Austin – collapsed into administration for the third time in as many years last month. 22 of the rump business’s 90 stores are already closing, with 274 staff losing their jobs.

• A week ago, Kesa-owned electricals chain Comet reported a 6.8% fall in sales compared to a year before, and annnounced plans to close 17 stores and downsize 9 others.

• On Tuesday, chocolatier Thorntons revealed that it would close up to 180 shops over the next three years, accounting for almost half of its entire company-owned store estate. The additional 227 franchisee-owned stores are not affected.

All these stories are worthy of a discussion in their own right – and will more than likely crop up again in future blog posts – but, looked at as a whole, what do they tell us about the condition of UK retail right now?

TJ Hughes, Sunderland (7 Sep 2009)

Whenever a familar high street name is in danger, it’s easy to wheel out all the usual arguments about the effects of online shopping, supermarkets’ assault into non-food, and the bane of quarterly rent payments or upward-only rent reviews.

Squeezed consumer spending is clearly also a huge issue at present. The sectors that Comet and HomeForm inhsbit – electricals and home improvement – are both among the most challenging places to be right now, as demonstrated by difficult trading at Dixons, Best Buy’s struggle to make an impression in the UK, and the recent collapse of Focus DIY.

Focus, Consett (4 Jun 2011)

Without a doubt, these economic or market factors have all contributed to the recent bad news, but they don’t explain why some retailers are collapsing when plenty of others are, if not exactly thriving, at least weathering the economic storm. The John Lewis Partnership, for example, today published its healthiest weekly sales figures for some time, with the Delia effect at Waitrose and the launch of the John Lewis Clearance pushing up turnover by 12.5% compared to a year ago.

Just as John Lewis can usually be relied upon to deliver good news, it’s very rarely a complete surprise when a particular retailer goes under. Look at this week’s casualties, and you’ll see that most of them share one or more of the same attributes:

• Lack of clarity regarding the brand or proposition
• A perception of being a ‘legacy’ retailer
• Stronger competitors within their sector
• A reputation simply for being cheap, rather than offering value
• Instability and a lack of strategic direction through constant changes in ownership or management.

Habitat fascia, York (17 Jul 2010)

In its heyday in the 1960s and 70s, Habitat, for example, was truly a design and retail innovator. However, squeezed between Ikea at the value end and Heal’s and John Lewis at the top end, Habitat has since struggled to define its niche. Meanwhile, a shrinking store estate over the years – 33 now, from a recent peak of 42 – has reinforced the impression of a business in decline.

Closed-down Habitat, Birmingham (18 Mar 2010)

Jane Norman, too, has seemingly lost sight of the reasons that made it successful in the first place, with my female friends bemoaning what they see as its move downmarket – a dangerous shift, that brings it into more direct competition with bigger, and cheaper, chains such as Primark, Peacocks and New Look.

Those big names in the clothing sector have also caused difficulties for TJ Hughes and Life & Style – raising their fashion credentials in order to offer customers all-round value, and leaving behind those retailers that have sought to compete primarily on price. Add in Life & Style’s record of previous collapses (as Ethel Austin), and the fact that TJ Hughes has had four owners in the last decade, and there’s little wonder that both have become distracted from what needs to be their core focus – being top-notch retailers.

In Thorntons’ case, many of its difficulties seem self-inflicted, throwing away the upmarket cachet of its brand by spreading itself too thinly. Creating a bloated estate of 600 shops would be unwise enough, particularly when quite a lot of them offer uninspring store environments in unglamorous locations. However, letting your product be sold in supermarkets and Wilkinson was always likely to be a disaster – undermining your brand’s reputation for quality while simultaneously removing the need for shoppers to visit your own stores.

What does all this mean, looking forward? Well, those retail businesses that simply aren’t up to scratch in terms of proposition, brand, strategy or customer experience will need to up their game in order to survive. However, there’s no reason why those businesses that are well-run and have a clear reason to exist shouldn’t continue to prosper.

John Lewis logo

No, don’t choke on your cornflakes… that’s a serious question.

My interest was piqued last month when the Tamworth Herald ran a story under the headline ”Striking design’ of unit to be built next to Herald offices’, on the town’s ever-growing Ventura Retail Park.

In it, the piece gave a few more details about what the new unit would be like, describing it as “similar in size to [Ventura's] Marks and Spencer, ASDA and Sainsbury’s” and “one of the more dominant outlets on the retail park.” It added that “while no details of which retailer will move into the building have been revealed, the building’s ‘striking’ design was unveiled last month.”

M&S at Ventura Park, Tamworth (24 Dec 2009)

This immediately got me thinking. After all, there aren’t many retailers, besides John Lewis and Best Buy, who are currently opening massive, ‘strikingly’ designed stores on retail parks. B&Q was another possibility, but the same edition of the Herald had revealed that the DIY retailer was already going to be opening a new store behind Sainsbury’s, at nearby Cardinal Point, alongside a new Next and a branch of Maplin.

Publicly available planning applications are often a good source of extra information, but it’s taken me until now to check out the application for the development in question (0648/2010) – which was submitted at the end of November and approved in January. It seems that a development of the size proposed was actually already approved for this site in 2008, so the application was for a ‘variation of conditions’, with revised plans and elevations, rather than an entirely new proposal.

I was curious to see the ‘striking’ design of the building, so took a look at the elevation drawings attached to the application. Here’s a screenshot (click image to view in larger size):

Screenshot of elevation drawings

Hmmm… a large building with lots of double-height glazing, grey cladding and white lettering. Where have I seen that before? Let’s do a Google Image Search for ‘John Lewis at Home’… (again, click to see it a larger size)

Google Image search for 'John Lewis at Home' (16 Feb 2011)

What do you reckon? In the event that the new store isn’t going to be John Lewis, it’s certainly doing its very best to resemble one.

The idea of ‘John Lewis Tamworth’ may sound far-fetched to begin with – after all, the town is not known for attracting more upmarket retailers, and has a town centre that has become increasingly value-focused. However, John Lewis’s new ‘at Home’ format makes the prospect quite plausible.

Largely based on out-of-town retail parks, four such stores have opened to date – in Poole, Croydon, Swindon and Tunbridge Wells – with two more planned for Exeter (on a city centre site that used to be Debenhams) and Chester. Each John Lewis at Home offers the retailer’s full range of  furniture, furnishing accessories, electricals and home technology, though items from other departments – including fashion, beauty and nursery – can be ordered instore for home delivery or next-day collection.

If John Lewis is looking to plug the gap between its Solihull, Leicester and Nottingham stores, Tamworth’s sprawling and bustling Ventura Retail Park – which attracts visitors from all across the Midlands thanks to its strong offer and easy connections to the motorway network – begins to make good sense as a location.

Of course, two other important debates – what the continued expansion of Ventura Retail Park means for local traffic congestion and for Tamworth town centre – must not be neglected, and key to this is making it easier for Ventura visitors to access the town centre’s attractions.

Still, if John Lewis were to open in Tamworth, that would be rather a fantastic coup, wouldn’t it?

Clas Ohlson, Leeds (21 Jan 2011)

Things have been pretty quiet on the Clas Ohlson front since the Swedish hardware retailer announced the latest stage of its UK expansion, back in August. Those new stores in Cardiff, Doncaster and Norwich have subsequently opened, just before Christmas, but there’s no news yet on where the next additions to Clas Ohlson’s 11-strong UK store portfolio might be.

In August, the retailer’s chief executive had suggested that the chain could grow to as many as 200 UK stores, though a statement in December indicated that its rate of expansion in Britain was being scaled back due to the “strained” UK economy. In terms of actual store openings, this meant that Clas Ohlson would be envisaging 4-6 new UK stores by the end of the current financial year, rather than the 6-10 that had originally been planned.

Window display at Clas Ohlson, Leeds (21 Jan 2011)

An article in Monday’s Guardian recycles some of this earlier commentary, but gives some positive news regarding Clas Ohlson’s long-term plans for this country. It quotes boss Klas Balkow as saying that “there’s no panic”, and that “there is a long-term commitment from myself, the board and the company’s owners. We are not rushing – we are taking it step by step and building the brand.”

Screenshot of Clas Ohlson website (9 Feb 2011)

The article indicates that “a UK website will be launched in the second half of this year” – presumably a transactional one, given that a basic site with product information already exists – but gives no clues regarding the locations or timing of the next high-street shops. However, in just the same way as US giant Best Buy is selling online in the UK at the same time as building a fledgling store estate, making the Clas Ohlson website transactional will be an important step in increasing the retailer’s UK reach, and in continuing to develop awareness of the brand.

As you’d expect, I couldn’t resist paying a visit to Clas Ohlson’s Leeds store when I was in the city last month. Occupying a prominent corner chunk of The Headrow’s Broadgate development – the building that used to house the Allders (and, before that, Lewis’s) department store – the store benefits from a fantastic, prime location at the top of Briggate, with double-height glazing that makes a bold impression on the street.

Clas Ohlson from top of Briggate, Leeds (21 Jan 2011)

Inside, the 23,142 sq ft store is spread across two floors, and feels very spacious – indeed, other than the shop in Manchester’s Arndale Centre, the Leeds store is Clas Ohlson’s largest to date. On the downside, I was less impressed by the choice of piped music (maybe it’s my age, but I don’t find rapping condusive to relaxed shopping), and the store seemed much, much quieter than it really should have been on a Friday afternoon at 5 o’clock, a full one and a half hours before closing.

Clas Ohlson, Leeds (21 Jan 2011)

Perhaps I just visited at a quiet time, as Clas Ohlson’s UK sales figures continue to be quite strong. The latest figures, for December 2010, show UK sales of SEK 42, compared to SEK 26 a year earlier. As usual, however, it’s important to understand what’s being compared with what – where December 2010 had eight stores trading for the whole month and the three new ones for only part of it, December 2009 had only four fully-open stores with a fifth (Watford) opening during the month. On this basis, and taking into account the generally smaller size of the recently opened shops, sales densities would seem to be more or less on a par with a year ago.

Going back a couple of months, Clas Ohlson announced sales of SEK 18m (about £1.64m) from its then seven UK stores during October 2010 – again, a seemingly headline-grabbing 216% increase from the SEK 6m figure recorded a year earlier, when the retailer had just two stores in this country.

While Clas Ohlson does not publish like-for-like comparisons explicitly – the reason why meaningful comparison of the numbers is difficult – we do know, as I previously blogged, that sales for June last year were SEK 15m. Given that Clas Ohlson’s UK store portfolio (seven stores) was the same in October as it was in June, October’s SEK 18m figure indicates a 20% increase in like-for-like sales over this 4-month period – a strong performance by any measure.

On the other hand, while the increase in UK sales densities – from SEK 2.1 m per store in June to nearly SEK 2.6m in October – is heading in the right direction, there’s still a way to go before the UK branches are generating as much income as their more mature equivalents in Sweden or Norway.

Still, as long as Clas Ohlson is determined to persevere with its UK ambitions, ride out the economic downturn, and make its offer available to more British shoppers, there’s every chance that its quirky ‘usefulshopps’ will become an increasingly common fixture on our high streets.

Still not sure if this is an old Woolies or not... (7 Mar 2010)

Back in January I posted a shot of what is now the A&S Discount store in Byker’s Shields Road, questioning whether it had ever been a Woolworths store, given its architectural similarities to many of the other former Woolies that I’d visited. [UPDATE: We now know it WAS - see

Since then, I’ve received many welcome comments and observations, visited even more old Woolies that look very similar to the said building in Byker, and trawled through quite a few old photographs of Byker (such as this lot) to try and find some evidence of the property’s past.

...but most people seem to agree that it *does* look like one (7 Mar 2010)

Though I’m little closer to identifying whether the building once was a Woolworths or not, information from Mike and his mother – both from Byker – suggests that it certainly hasn’t been a Woolies for 45 years or more. While Mike and his mum do remember a Woolworths on Shields Road, that store occupied a different building all together to the one that I blogged about:

Woolworths on Shields Road was further up where the Decorflair store is now. I confirmed this with a reliable source… my mother! (we are from Byker!) It goes back at least 1965 and probably a lot earlier… I can just remember going there as a kid in the 80’s. Not sure when it exactly closed, but it must have been the mid to late 80’s…

I took a photo of the Decorflair store today (below), though it’s difficult to see much of the shopfront when the shutters are down. Happily, Google Street View comes to the rescue, showing a frontage that certainly retains the appearance of a 1960s Woolworths store.

Former Woolworths (now Decorflair), Shields Road, Byker, with the former Beavan's department store in the background (7 Mar 2010)

Needless to say, if anyone has any further information about either the Decorflair-definite-Woolies or the A&S-possible-Woolies I’d be delighted to hear from you. Did the Decorflair Woolworths indeed supersede the A&S one, perhaps sometime in the 1950s or early 1960s? And do any old photos of that stretch of Shields Road exist – perhaps shots of the splendid former Beavan’s department store, showing glimpses of the two buildings in question either side of it?

Before I finish, it would be remiss of me not to update on yet another Byker Woolworths – the most recent incarnation, at Newcastle Shopping Park, which opened in 2004 and closed following the retailer’s administration. There’s not much to report though – it’s still empty, and looks no different to how it did back in September.

Former Woolworths, Newcastle Shopping Park, Byker (7 Mar 2010)

Given that it’s 95,000 sq ft anchor store remains vacant, Newcastle Shopping Park seems to be managing surprisingly well. The car park was certainly busy when I visited today, and the Asda Living store had plenty of customers in both the store and the cafe. I also noted that the former JJB Fitness Club has been rebranded as DW Sports Fitness since my last visit in September, following JJB’s March 2009 disposal of its fitness clubs business to Dave Whelan – the ex-footballer who had created JJB Sports in the first place, back in 1977, before selling his last stake thirty years later.

Looking ahead, it’s hard to imagine a retailer that would want to occupy the whole of the enormous former Woolworths site. It’s probably about the right size for Best Buy (opening its first UK stores this Spring) or a Currys Megastore, but those types of retailers are more likely to favour the busier, higher profile retail parks on Tyneside, such as Team Valley or Silverlink, for their flagship stores. Perhaps carving the unit up into two or three smaller stores will ultimately prove to be the best way forward?