Department Stores - Europe - April 2016

EUROPE – OVERVIEW
Department store definition
Market size
Financial definitions
Abbreviations
VAT around Europe
Figure 1: VAT rates around Europe, 2011-16
EXECUTIVE SUMMARY – EUROPE - THE MARKET
 DEPARTMENT STORE RETAILERS’ SALES
Figure 2: Big five European countries: Estimated department store sector sales (ex VAT) by country, 2012-15
Leading department store groups
Figure 3: Europe: Top 30 leading department stores, 2011/12-2015/16
Figure 4: European department stores, estimated total market size, 2011-15
 MIXED GOODS RETAILERS’ SALES
Figure 5: Europe: Mixed goods retailers sales, ex VAT, 2011-15
Figure 6: Europe: Mixed goods retailers forecast sales, ex VAT, 2016-20
 MARKET SHARES
Figure 7: Europe: Top 10 department stores share of all department store sales, 2013-15
Figure 8: European department stores: Sector structure, 2015
 ONLINE
Figure 9: Online share of all department store sales, 2015
Figure 10: UK, France, Spain, Germany, Italy share of Big 5 online department store sales, 2015
EXECUTIVE SUMMARY – EUROPE – THE CONSUMER
Department stores in Europe
Figure 11: Proportion of survey respondents that have visited* a department store in the last 6 months, March* 2016
Figure 12: Proportion of survey respondents that have visited a department store outside their own country, March 2016
Figure 13: Most used department store by market and percentage of respondents using that store most regularly, March* 2016
Satisfaction
Figure 14: Proportion of shoppers who are satisfied with attributes of their most used store, March* 2016
 WHAT WE THINK
France
Germany
Italy
Spain
UK
EXECUTIVE SUMMARY – EUROPE – LAUNCH ACTIVITY AND INNOVATIONS
Creative Collaborations enhance in-store experience
Figure 15: Xavier Veilhan exhibition at Galeries Lafayette
Galeria Kaufhof steps up on sustainability
Galeries Lafayette’s eco-friendly rooftop garden
Figure 16: Galeries Lafayette, Boulevard Haussmann, Rooftop Garden
The Printemps and Furla Home Warming Party
A renewed focus on menswear departments
Figure 17: Galeries Lafayette, Boulevard Haussmann, Revamped menswear department
A new emphasis on beauty for Le Bon Marché
Le Bon Marché new footwear and homeware departments
A Burberry Christmas at La Rinascente
FRANCE
 OVERVIEW
What you need to know
Areas covered in this report
 EXECUTIVE SUMMARY
The market
Spending and inflation
Department stores’ share of clothing and beauty markets
Figure 18: France: Estimated retail distribution of spending on clothing, 2014
Figure 19: France: Estimated retail distribution of spending on beauty and personal care goods, 2014
Sector size and forecast
Leading players
Key metrics
Market shares
Figure 20: France: Department stores’ share of mixed goods retailers’ sales, 2012 and 2015
Online
The consumer
Where they shop
Satisfaction levels
Figure 21: France: Department stores used most often, satisfaction with various criteria, March 2016
What we think
 ISSUES AND INSIGHTS
Struggling provincial stores
The facts
The implications
Need to invest in online operations
The facts
The implications
 THE MARKET – WHAT YOU NEED TO KNOW
Consumer spend held back by high unemployment
Department store sector sales remarkably resilient
Department stores’ share of clothing and beauty markets
 SPENDING
Figure 22: France: Spending on key department store product markets, (incl. VAT), at current prices, 2010-15
Department stores’ share of clothing and beauty markets
Clothing
 SECTOR SIZE AND FORECAST
Department store sector size
Figure 23: France: Department stores, estimates sector sales (excl VAT), 2011-15
Mixed goods retailers sector
Figure 24: France: Mixed goods retailers’ sales (excl. VAT), 2010-15
Figure 25: France: Mixed goods retailers’ sales forecasts (excl. VAT), 2015-20
 LEADING PLAYERS – WHAT YOU NEED TO KNOW
A third consecutive year of falling sales for Galeries Lafayette
Ramping up flagship store investment
Market share gains in 2014 drop off in 2015
 LEADING PLAYERS
Galeries Lafayette’s performance deteriorates
Multi-million euro flagship store makeovers
Figure 26: France: Leading department stores retailers’ sales, 2011-15
Figure 27: France: Leading department store retailers, store numbers, 2011-15
Figure 28: France: Leading department store retailers’ annual sales per outlet, 2011-15
 MARKET SHARES
Gains made in 2014 lost in 2015
Figure 29: France: Leading department store retailers’ shares of mixed goods retailers’ sales, 2012-15
 ONLINE
Online activity
Leading online players
 THE CONSUMER – WHAT YOU NEED TO KNOW
Low usage of department stores
Customer profile is young and affluent
Online offer needs to be improved
 WHERE THEY SHOP
Figure 30: France: Department stores visited, in-store or online, March 2016
Figure 31: France: Profile of department store shoppers, March 2016
 SATISFACTION LEVELS
Figure 32: France: Department store used most often, satisfaction with various criteria, March 2016
Figure 33: France: Galeries Lafayette and all other stores, satisfaction with various criteria, March 2016
 APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Data sources
GERMANY
 OVERVIEW
What you need to know
Areas covered in this report
 EXECUTIVE SUMMARY
The market
Spending and inflation
Department stores’ share of clothing and beauty markets
Figure 34: Germany: Estimated distribution of consumer spending on clothing and footwear by value in % terms, 2014
Sector size and forecast
Leading players
Key metrics
Market shares
Figure 35: Germany: Estimated shares of mixed goods retailers’ sales by value, 2015
Online
The consumer
Where they shop
Figure 36: Germany: The consumer: Department stores visited in the past six months, whether in-store or online, March 2016
Satisfaction levels
Figure 37: Germany: The consumer: Attitudes to department stores, March 2016
What we think
 ISSUES AND INSIGHTS
Innovation needs to accelerate on core product areas
The facts
The implications
Falling behind on online versus in-store service
The facts
The implications
 THE MARKET – WHAT YOU NEED TO KNOW
Consumer spending provides more buoyant background
Department stores under competitive pressure
Sector contracts again in 2015
 SPENDING
Figure 38: Germany: Spending on key department store product markets, (incl. VAT), at current prices, 2010-15
Department stores’ share of clothing & beauty markets
Mixed goods retailers the fourth largest channel for clothing
Figure 39: Germany: Estimated distribution of consumer spending on clothing and footwear by value in % terms, 2014
Pressure from low price and online retailers
Mixed goods retailers’ share of the beauty market
Figure 40: Germany: Estimated channels of distribution for personal care products (excluding services), 2013-15
 SECTOR SIZE AND FORECAST
Department store sector size
Figure 41: Germany: Department store sector, estimated sales (excl. VAT), 2012-15
Mixed goods sector continues relative decline
Figure 42: Germany: Mixed goods retailers’ sales (excl. VAT), 2010-15
Figure 43: Germany: Mixed goods retailers’ sales forecasts (excl. VAT), 2015-20
 LEADING PLAYERS – WHAT YOU NEED TO KNOW
Market leader Galeria Kaufhof has a new owner
KaDeWe also sees international investment
Midmarket underperforms but upmarket operators fare better
Online sales small
 LEADING PLAYERS
Galeria Kaufhof bought by Canada’s Hudson’s Bay Company
Midmarket operators miss out on growth in retail sales
KaDeWe majority stake goes to Thailand’s Central Group
Niche upmarket operators perform better
Figure 44: Germany: Leading department stores retailers’ sales, 2012-15
Figure 45: Germany: Leading department store retailers, store numbers, 2012-15
Figure 46: Germany: Leading department store retailers’ annual sales per outlet, 2012-15
 MARKET SHARES
Karstadt continues to fall behind Galeria Kaufhof
Figure 47: Germany: Leading department store retailers’ shares of mixed goods retailers’ sales, 2012-15
 ONLINE
Online activity
Big department stores lag in online development
 THE CONSUMER – WHAT YOU NEED TO KNOW
Galeria Kaufhof a long way ahead
Two main players closely positioned
Customers happier with in-store experience than with online
 WHERE THEY SHOP
Galeria Kaufhof remains market leader
Figure 48: Germany: The consumer: Department stores visited in the past six months, whether in-store or online, March 2016
 CUSTOMER PROFILES
Main players attract affluent visitor base
Dangers of cannibalisation
Figure 49: Germany: The consumer: Department stores visited in the past six months, whether in-store or online, average age and affluence, March 2016
 SATISFACTION LEVELS
Changing rooms and staff attitude see highest satisfaction
Room for improvement in advice, returns and catering
Lack of strong views on many aspects
Figure 50: Germany: Department store used most often, satisfaction with various criteria, March 2016
Attitudes to department stores and where people shop
Galeria Kaufhof more often ahead on satisfaction
Figure 51: Germany: Attitudes to department stores and where people shop, March 2016
 APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Data sources
ITALY
 OVERVIEW
What you need to know
Areas covered in this report
 EXECUTIVE SUMMARY
The market
Spending
Department stores’ share of clothing and beauty markets
Figure 52: Italy: Estimated retail distribution of spending on clothing inc. VAT, 2014
Figure 53: Italy: Estimated retail distribution of spending on beauty and personal care products, inc VAT, 2014
Sector size and forecast
Leading players
Key metrics
Market shares
Figure 54: Italy: Department stores’ estimated market shares, 2012 and 2015
Online
The consumer
Where they shop
Figure 55: Italy: The consumer: Department stores visited, either in-store or online in the last six months, March 2016
Satisfaction levels
Figure 56: Italy: Satisfaction levels with department store most regularly used in the last six months, March 2016
What we think
 ISSUES AND INSIGHTS
Online continues to lag behind
The facts
The implications
Battle for youth
The facts
The implications
 THE MARKET – WHAT YOU NEED TO KNOW
Consumer spending improves for second consecutive year
A small share of category spend
Strong growth in the department store sector
Time for online
 SPENDING
Figure 57: Italy: Spending on key department store product markets, (incl. VAT), at current prices, 2011-15
Department stores’ share of clothing & beauty markets
Clothing
Beauty
 SECTOR SIZE AND FORECAST
Department store sector size
Figure 58: Italy: Department store sector estimated sales (excl. VAT), 2011-15
Mixed goods retailers sector
Figure 59: Italy: Mixed goods retailers’ sales (excl. VAT), 2010-15
Figure 60: Italy: Mixed goods retailers’ sales forecasts (excl. VAT), 2015-20
 LEADING PLAYERS – WHAT YOU NEED TO KNOW
La Rinascente continues to outperform
Coin sales stagnate
Department stores lag in e-commerce development
 LEADING PLAYERS
La Rinascente extends its lead over Coin
Figure 61: Italy: Leading department stores’ estimated net revenues, 2011-15
Figure 62: Italy: Leading department store retailers’ store numbers, 2011-15
Figure 63: Italy: Leading department store retailers’ annual sales per outlet, 2011-15
 MARKET SHARES
La Rinascente continues to grow its market share
Figure 64: Italy: Leading department store retailers’ shares of Department stores’ sales, 2012-15
Figure 65: Italy: Leading department store retailers’ shares of Mixed goods retailers’ sales, 2012-15
 ONLINE
Online activity
Leading online players
 THE CONSUMER – WHAT YOU NEED TO KNOW
Higher store count makes Coin the most popular
Italian department stores excel on staff attitude and product availability
La Rinascente leads on customer satisfaction
 WHERE THEY SHOP
Coin the most popular department store
Figure 66: Italy: The consumer: Department stores visited, either in-store or online in the last six months, March 2016
La Rinascente appeals to a younger customer
Figure 67: Italy: Age breakdown of consumers that have visited La Rinascente or Coin store in the past six months, March 2016
 SATISFACTION LEVELS
Staff attitude and size availability provoke highest satisfaction
Value for money generates the strongest level of dissatisfaction
Lack of commitment to online
Figure 68: Italy: Department store visited most often, satisfaction with various criteria, March 2016
Appealing to the young
Figure 69: Italy: Satisfaction with department stores, by age and affluence, March 2016
La Rinascente generates higher levels of satisfaction
Figure 70: Italy: Satisfaction levels with department store most regularly used in the last six months, percentage point deviation from the average, March 2016
 APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Data sources
SPAIN
 OVERVIEW
What you need to know
Areas covered in this report
 EXECUTIVE SUMMARY
The market
Spending
Department stores’ share of clothing and beauty markets
Figure 71: Spain: Estimated retail distribution of spending on clothing, 2014
Figure 72: Spain: Estimated retail distribution of spending on beauty and personal care products, inc VAT, 2014
Sector size and forecast
Leading players
Key metrics
Market shares
Figure 73: Spain: El Corte Inglés’s share of mixed goods retailers’ sales, 2012 and 2015
Online
The consumer
Where they shop
Satisfaction levels
Figure 74: Spain: Satisfaction levels with department store most regularly used in the last six months, March 2016
What we think
 ISSUES AND INSIGHTS
El Corte Inglés on the road to recovery
The facts
The implications
Attracting a younger market
The facts
The implications
 THE MARKET – WHAT YOU NEED TO KNOW
Spending turns a corner with smaller ticket categories leading the way
ECI is second largest fashion group in Spain
A sector with just one retailer
 SPENDING
Figure 75: Spain: Spending on key department store product markets, (incl. VAT), at current prices, 2010-15
 DEPARTMENT STORES’ SHARE OF CLOTHING & BEAUTY MARKETS
Clothing
Beauty
 SECTOR SIZE AND FORECAST
Department store sector size
Mixed goods retailers sector
Figure 76: Spain: Mixed goods retailers’ sales (excl. VAT), 2010-15
Figure 77: Spain: Mixed goods retailers’ sales forecasts (excl. VAT), 2015-20
 LEADING PLAYERS – WHAT YOU NEED TO KNOW
A sector with only one retailer
Improvement in performance expected to continue
Good potential online for department store product categories
 LEADING PLAYERS
ECI back on an even keel
Figure 78: Spain: Leading department stores retailers’ net revenues, 2011-15
Figure 79: Spain: Leading department store retailers’ store numbers, 2011-15
Figure 80: Spain: Leading department store retailers’ annual sales per outlet, 2011-15
 MARKET SHARES
Gaining share of the mixed goods category
Figure 81: Spain: El Corte Inglés’s share of mixed goods retailers’ sales, 2012-15
 ONLINE
Online activity
Leading online players
Figure 82: Spain: The consumer: Type of store bought from in the last six months, February 2015
 THE CONSUMER – WHAT YOU NEED TO KNOW
El Corte Inglés stands alone
Satisfaction with elements of department store service
Satisfaction with elements of service by demographics
 WHERE THEY SHOP
The one and only El Corte Inglés
Figure 83: Spain: The consumer: Department stores visited, either in-store or online in the last six months, March 2016
ECI customer profile
Figure 84: Spain: The consumer: Profile of respondents that had visited El Corte Inglés in the last six months, March 2016
 SATISFACTION LEVELS
Customers satisfied with offer in-store
Some dissatisfaction with pricing
Figure 85: Spain: Department store used most often, satisfaction with various criteria, March 2016
Satisfaction levels by retailer
Figure 86: Spain: Satisfaction levels with El Corte Inglés, March 2016
Satisfaction levels by demographics
Figure 87: Spain: Customer profile, satisfaction with elements of department store retailing, March 2016
 APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Data sources
UK
 OVERVIEW
What you need to know
Areas covered in this Report
 EXECUTIVE SUMMARY
The market
Growth slows in 2015
Figure 88: Best and worst case forecast for department stores sales, 2010-20
Consumer background unhelpful
Companies, brands and innovation
John Lewis leading the sector
M&S bringing up the rear
Figure 89: Top department stores’ market shares, 2014 and 2015
John Lewis vs M&S
The future of all department stores rests on integrating their online and in-store operations
Figure 90: Online share of leading department stores sales, 2013-15
Space allocation
Figure 91: Department stores: Summary space allocation, March 2016
Retail product mix
Figure 92: Leading department stores: Estimated share of sales by broad product category, 2015/16
Brands
Figure 93: Attitudes towards and usage of selected brands, November and December 2015
The consumer
M&S drops in popularity among women
Figure 94: Department stores purchased from in the last six months, whether in-store or online, February 2016
John Lewis gets high scores for delivery and returns
Figure 95: Department stores purchased from in the last six months, in-store or online, February 2016
Customers happy with quality, but scope for improvement in availability of sizes and fashionable clothing ranges
Figure 96: Satisfaction with last purchase from a department store, by different factors, February 2016
M&S no longer seen as value for money
Figure 97: Overall satisfaction with last department store shopped at, February 2016
What would encourage shoppers to spend more?
Figure 98: What would encourage consumers to shop more at a department store, February 2016
Is it worth paying extra for anything?
Figure 99: Willingness to pay extra for specific delivery options when shopping online at department stores, February 2016
Interest in innovations
Figure 100: Interest in innovations when shopping at department stores, February 2016
What we think
 ISSUES AND INSIGHTS
How have department stores performed over the last year?
The facts
The implications
What are the main growth opportunities for department stores?
The facts
The implications
How are department stores competing in a multichannel world?
The facts
The implications
 THE MARKET – WHAT YOU NEED TO KNOW
Department store sales £15.4 billion, with modest growth expected.
Most product sectors performing well
Ageing population
Consumer confidence holding up well
Tourism boost
 SECTOR SIZE AND FORECAST
Definitions
Growth slows in 2015
Figure 101: Department stores: Sector sales, 2011-15
Outlook
Figure 102: Best and worst case forecast for department stores sales, 2010-20
Forecast – The data and methodology
Figure 103: Department store sales in current and constant prices, 2010-20
Methodology
 CONSUMER SPENDING
Figure 104: Consumer spending on key department store categories, 2011-15
 MARKET DRIVERS
Aging population
Figure 105: Trends in the age structure of the UK population, 2010-20
Consumers remain cautious, but high earners prosper
Leisure activities prioritised over retail spend
Visitors to the UK on the rise
Figure 106: Overseas residents’ visits to the UK, by area of residence, 2014 and 2015
 KEY PLAYERS – WHAT YOU NEED TO KNOW
Creating exciting places to shop
Fortnum & Mason the top performer
M&S bringing up the rear
John Lewis vs M&S
The future of all department stores rests on integrating their online and in-store operations
Space allocation
Retail product mix
 LAUNCH ACTIVITY AND INNOVATIONS
John Lewis invests £35 million in new Birmingham store
Figure 107: John Lewis’ new store in Grand Central, Birmingham
New ‘department-less’ concept
Selfridges launches Body Studio
Figure 108: Selfridges’ new Body Studio department, April 2016
Harrods dedicates October to menswear
Harvey Nichols’ beauty launches
Department stores expand dining experiences
New boutique department store for Sheffield
 ADVERTISING AND MARKETING ACTIVITY
Leading department stores cut back on advertising spend
Leading department stores’ advertising spending
Figure 109: Recorded above-the-line, online display and direct mail total advertising expenditure by the leading department stores, 2012-15
Television is now the favoured media type
Figure 110: Recorded above-the-line, online display and direct mail total advertising expenditure by the leading department stores, by media type, 2015
Campaign highlights in 2015
A note on adspend
 LEADING SPECIALIST RETAILERS
High-end department stores suffer slowdown
Figure 111: Annual segment growth: Mid-market versus high-end, 2011-15
Figure 112: Major retailers’ annual sales growth (some estimated) versus average segment growth, 2015
Leading retailers by sales
Figure 113: Leading department stores: Net revenues, 2011-15
Consolidated sales versus gross transactional values
Store numbers
Figure 114: Leading department stores: Outlet numbers, 2011-15
Sales per store
Figure 115: Leading department stores: Annual sales per outlet, 2011-15
Total sales area
Figure 116: Leading department stores: Total sales area, 2011-15
Sales densities
Figure 117: Leading department stores: Annual sales per sq m, 2011-15
Operating profits and margins
Figure 118: Leading department stores: Operating profits, 2011-15
Figure 119: Leading department stores: Operating margins, 2011-15
 MARKET SHARES
John Lewis leading the sector
M&S bringing up the rear
Figure 120: Top department stores’ market shares, 2014 and 2015
John Lewis vs M&S
House of Fraser strong recovery
Figure 121: Leading department stores’ market shares, 2011-15
 ONLINE
Leading retailers’ online sales
Figure 122: Leading department stores, estimated online sales, 2012-15
Figure 123: Online share of leading department stores sales, 2013-15
Figure 124: Department store sales, 2012-15
Click-and-collect
 SPACE ALLOCATION SUMMARY
Overview
Figure 125: Department stores: Summary space allocation, March 2016
Detailed space allocation
House of Fraser refurbished beauty halls
Debenhams introduces more third-party clothing concessions and eateries
Selfridges welcomes The Conran Shop
John Lewis’ in-store home hub
Food occupies a quarter of M&S in-store space
Figure 126: Department stores: Detailed space allocation, March 2016
 RETAIL PRODUCT MIX
Figure 127: Estimated space allocation of broad department stores product categories, 2015
Figure 128: Leading department stores: Estimated sales by broad product category, 2015/16
Figure 129: Leading department stores: Estimated share of sales by broad product category, 2015/16
Figure 130: Leading department stores: Estimated sales density by broad product category, 2015/16
 BRAND RESEARCH
What you need to know
Brand map
Figure 131: Attitudes towards and usage of selected brands, November and December 2015
Key brand metrics
Figure 132: Key metrics for selected brands, November and December 2015
Brand attitudes: Marks & Spencer is highly trusted
Figure 133: Attitudes, by brand, November and December 2015
Brand personality: Harrods boasts the most exclusive image
Figure 134: Brand personality – Macro image, November and December 2015
Brand personality: Selfridges seen as cutting-edge, yet expensive
Figure 135: Brand personality – Micro image, November and December 2015
Brand analysis
John Lewis is highly regarded by consumers
Figure 136: User profile of John Lewis, November 2015
Harrods the most differentiated department store
Figure 137: User profile of Harrods, December 2015
Selfridges is a fun brand, but could do with customer service improvements
Figure 138: User profile of Selfridges, December 2015
Marks & Spencer enjoys a position of strength
Figure 139: User profile of Marks & Spencer, November 2015
House of Fraser’s online service is an area of strength
Figure 140: User profile of House of Fraser, December 2015
Debenhams associated with accessibility, but store experience is lacking
Figure 141: User profile of Debenhams, November 2015
 THE CONSUMER – WHAT YOU NEED TO KNOW
M&S drops in popularity among women
John Lewis gets high scores for delivery and returns
M&S no longer seen as value for money
Own-brands are main draw
Creating a leisure and retail destination
Most demand for same-day delivery charges
Millennials most drawn to innovations
 WHERE THEY SHOP
M&S drops in popularity among women
Figure 142: Department stores purchased from in the last six months, whether in-store or online, February 2016
Figure 143: Department stores purchased from in the last six months, whether in-store or online, February 2015 and 2016
John Lewis remains most popular online
Figure 144: Department stores purchased from in the last six months, in-store or online, February 2016
Debenhams draws more young women
Where consumers browse
Figure 145: Department stores where consumers have browsed in the last six months, either in-store or online, February 2016
 SATISFACTION WITH DEPARTMENT STORES
Customers happy with quality, but scope for improvement in availability of sizes and fashionable clothing ranges
Figure 146: Satisfaction with last purchase from a department store, by different factors, February 2016
Key driver analysis
Figure 147: Key drivers of overall satisfaction with department store last shopped at, February 2016
Figure 148: Overall satisfaction with department store last shopped at – Key driver output, February 2016
How the department stores compare
Figure 149: Overall satisfaction with last department store shopped at, February 2016
How they perform on pricing and quality
Figure 150: Satisfaction with value for money, by department store last shopped at, February 2016
Figure 151: Satisfaction with product quality, by department store last shopped at, February 2016
Figure 152: Satisfaction with promotions/offers, by department store last shopped at, February 2016
How retailers score on fashionability and new product launches
Figure 153: Satisfaction with fashionable clothing range, by department store last shopped at, February 2016
Figure 154: Satisfaction with new product launches, by department store last shopped at, February 2016
Figure 155: Satisfaction with new product launches, by department store last shopped at, February 2016
Delivery, returns and click-and-collect
Figure 156: Satisfaction with delivery services, by department store last shopped at, February 2016
Figure 157: Satisfaction with returns process, by department store last shopped at, February 2016
Figure 158: Satisfaction with click-and-collect, by department store last shopped at, February 2016
 WHAT WOULD ENCOURAGE MORE SHOPPING AT DEPARTMENT STORES
Own-brands are main draw
Figure 159: What would encourage consumers to shop more at a department store, February 2016
Creating a leisure and retail destination
 WILLINGNESS TO PAY EXTRA FOR DELIVERY OPTIONS
Most demand for same-day delivery charges
Figure 160: Willingness to pay extra for specific delivery options when shopping online at department stores, February 2016
Unwillingness to pay for click-and-collect
 INTEREST IN INNOVATIONS
Millennials most drawn to innovations
Figure 161: Interest in innovations when shopping at department stores, February 2016
A third of under-25s drawn to visual search apps
 APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Forecast methodology
Sector benchmarks
Department stores
Mixed goods retailers
Statutory revenues versus GTV
Financial definitions
Sales per store, sales per sq m
Key driver analysis
Interpretation of results
Figure 162: Overall satisfaction with last department store shopped at – Key driver output, February 2016
Figure 163: Satisfaction with department store shopped at last, February 2016
Abbreviations
COIN
What we think
Expanding the Coin Excelsior format
Trouble for Excelsior Verona
Expanding its appeal to the young
Making progress with multichannel
Company background
Company performance
Figure 164: Coin: Group estimated sales performance, 2011/12-2015/16
Figure 165: Coin: Outlet data, 2011/12-2015/16
Retail offering
DEBENHAMS
What we think
Bolstered multichannel capabilities
First price right price strategy
Reduction in stock levels across weather-sensitive categories, particularly clothing
Renting out under-used shop space
Enhanced customer service programme
Injecting fresh talent into its Designers at Debenhams and other own brands
Partners’ local market expertise driving international expansion
Company background
Company performance
Figure 166: Debenhams: Group financial performance, 2010/11-2014/15
Figure 167: Debenhams: Outlet data, 2010/11-2014/15
Retail offering
EL CORTE INGLÉS (DEPARTMENT STORES)
What we think
Upward turn in operating profits
Change at the top hails a new era
Possibilities abroad, priorities at home
Positive improvements made
Online offering
Company background
Company performance
Figure 168: El Corte Inglés (Department Stores): Group financial performance, 2010/11-2015/16
Figure 169: El Corte Inglés (Department Stores): Outlet data, 2011/12-2015/16
Retail offering
FENWICK
What we think
Shutters e-commerce site
Store investment attracting new brands
More store events
Early house beauty service
Company background
Company performance
Figure 170: Fenwick Ltd: Group financial performance, 2010/11-2015/16
Figure 171: Fenwick Ltd: Outlet data, 2010/11-2015/16
Retail offering
GALERIA KAUFHOF (HUDSON’S BAY COMPANY)
What we think
New hope under HBC
Keeping existing management in place
HBC ownership will give it more negotiating power and investment
Focus on beauty, shoes and handbags
Major investment to include revamps of ten key store locations
Online expansion and development needs to accelerate further
Introducing the Saks OFF 5th outlet format
Competition from fellow department store Karstadt remains weak
Company background
Company performance
Figure 172: Galeria Kaufhof: Group financial performance, 2010/11-2014/15
Figure 173: Galeria Kaufhof: Outlet data, 2009/10-2014/15
Retail offering
GALERIES LAFAYETTE
What we think
Investing for the future
Revamping Haussmann store after 15 years
Shuts stores but French regional profitability remains a problem
France still offers opportunities
Online still small and targets remain modest
Revamping own label could have dual benefits
Overseas store plans ambitious but upside limited by franchise model
Company background
Company performance
Figure 174: Galeries Lafayette (Group): Group sales performance, 2010-15
Figure 175: Galeries Lafayette: Outlet data, 2010-15
Retail offering
HARRODS
What we think
Influential MD stepping down
New Chinese visitor visa law boost
Reaching out to affluent consumers
New Mini Superbrands concept
Company background
Company performance
Figure 176: Harrods Ltd: Group financial performance, 2010/11-2014/15
Figure 177: Harrods Ltd: Outlet data, 2010/11-2015/16
Retail offering
HARVEY NICHOLS UK
What we think
Expanding online delivery coverage
A differentiated and compelling store proposition
Loyalty card app
Company background
Company performance
Figure 178: Harvey Nichols UK: Group financial performance, 2010/11-2015/16
Figure 179: Harvey Nichols UK: Outlet data, 2010/11-2015/16
Retail offering
HOUSE OF FRASER PLC
What we think
Refurbished stores driving bricks-and-mortar like-for-like sales growth
Multichannel investment boosts online sales growth
Bricks-and-mortar overseas expansion
Profitable own brand offering
Company background
Company performance
Figure 180: House of Fraser Plc: Group financial performance, 2010/11-2014/15
Figure 181: House of Fraser Plc: Outlet data, 2010/11-2014/15
Retail offering
JOHN LEWIS
What we think
Transforming the in-store experience
UK store expansion
Risk-averse approach to overseas opportunities
E-commerce international expansion
Digital shopping experience driving sales through mobile devices
Fashion credentials
Company background
Company performance
Figure 182: John Lewis Plc (department store): Group financial performance, 2011/12-2015/16
Figure 183: John Lewis Plc (department store): UK outlet data, 2011/12-2015/16
Retail offering
KARSTADT (SIGNA RETAIL)
What we think
“Kaufstadt” tie up finally off the agenda
Fashion focus on core customer of 45-plus woman
Shakes up other merchandise areas with new partnerships
Online strategy appears to be languishing
KaDeWe Group has major investment planned
Company background
Company performance
Figure 184: Karstadt (Signa retail): Group financial performance, 2010/11-2014/15
Figure 185: Karstadt (Signa Retail): Outlet data, 2010/11-2014/15
Retail offering
LA RINASCENTE
What we think
Adding an annex
Lacking an online option
Appealing to international visitors
Company background
Company performance
Figure 186: Rinascente (Department Stores): Group sales performance, 2010/11-2014/15
Figure 187: Rinascente (Department Stores): Outlet data, 2010/11-2014/15
Retail offering
LE BON MARCHÉ
What we think
Stylish department makeovers helping drive revenue growth
La Grande Epicerie de Paris to launch own-label range of gourmet food
Exclusive brands and experiences strengthen destination status
A must-see cultural tourist icon
24 Sèvres helping to attract a younger clientele
Company background
Company performance
Figure 188: LVMH Selective Retail, financial performance, 2011-15
Figure 189: Le Bon Marché: Estimated sales performance, 2011-15
Figure 190: Le Bon Marché: Outlet data, 2011-15
Retail offering
MARKS & SPENCER
What we think
New chief executive to breathe new life into M&S’ fashion range
New beauty ambassador and revamped beauty halls
New loyalty scheme launched
Working on improving the store experience
Expanding click-and-collect options
Company background
Company performance
Figure 191: Marks & Spencer: Group financial performance, 2010/11-2015/16
Figure 192: Marks & Spencer: Outlet data, 2010/11-2014/15
Figure 193: Marks & Spencer: Store portfolio, September 2015
Retail offering
PRINTEMPS
What we think
Stay-away high-spending tourists and stay-at-home French shoppers
150th anniversary campaign reinforces Printemps brand image
The largest menswear store in the world expected to be a big draw
M-commerce an opportunity to engage and connect with a younger audience
Sunday opening hours negotiation deadlock robs Printemps of additional revenue
Company background
Company performance
Figure 194: Printemps: Estimated group financial performance, 2011-15
Figure 195: Printemps: Outlet data, 2011-15
Retail offering
SELFRIDGES RETAIL
What we think
37,000 sq ft Body Studio
Personalised shopping experience
Shopping can and should be about more than just price or convenience
Enhanced multichannel capabilities
Company background
Company performance
Figure 196: Selfridges Retail Ltd: Group financial performance, 2010/11-2015/16
Figure 197: Selfridges Retail Ltd: Outlet data, 2010/11-2015/16
Retail offering