Brand House Behemoths: reshaping the landscape for UK high streets

As a wave of consolidation continues to wash across the retail industry, dominant high street retailers are seizing the opportunity to snap up ailing brands, and partner with other successful niche brands, that can diversify their offer. Through this, a new elite group of brand houses is emerging.

With their robust bank balances, highly evolved ecommerce platforms and proven management expertise, the likes of Next, Marks & Spencer, JD Sports and Frasers Group are successfully evolving their businesses into a fresh and modern take on the department store concept. But this list is not limited to just those names, since Tesco acquired Paperchase last month.

Acting like retail magnets – pulling struggling brands into their fold and attracting those that want to partner up to tap into their strength and scale – these flourishing retail giants are carving out an increasingly important role for themselves in the reshaping of UK high streets and shopping centres.

Already, this quartet alone has rescued British heritage brands such as Joules, Jaeger, Jack Wills and Gieves & Hawkes, alongside other popular high street names including Game and both Victoria’s Secret and Gap’s UK businesses.

Since they are less afflicted by the legacy issues currently blighting the UK retail industry – such as high levels of debt, overexposed property estates and underdeveloped ecommerce platforms – or they have already initiated strategies to address them, these retail titans have been able to move nimbly to acquire distressed brands, amassing strong portfolios that enable them to increasingly replicate the void left on UK high streets following the demise of traditional department store chains like Debenhams, BHS and House of Fraser.

Using the administration process to jettison the debt and unprofitable stores that brought the distressed brands to the brink, and then coupling these newly reshaped businesses with their own sophisticated digital platforms and data processing capabilities, has empowered the retail behemoths to breathe life back into these popular household names.

Struggling online brands – such as Made.com, Sofa.com and Missguided – have also been taken under their powerful wing and turned around the same way, through access to strong ecommerce platforms, increased brand exposure and efficient online fulfilment capabilities. It is these key benefits that have also attracted a swathe of niche brands such as Mamas & Papas, Clarks, Claire’s and Smiggle to strike partnership deals with these giants, to bolster their own high street and online reach.

There will undoubtedly be more of these administration deals and partnerships to come, as the cost-of-living and energy crises continue to bear down on mid-market retailers, and smaller niche brands look for cost-effective ways to quickly ramp up both their high street and online footprints.

But as these retail powerhouses build their carefully curated offers, diversifying their brand portfolios to attract new shoppers through their doors and onto their websites, they are also serving a very valuable role on the high street. By keeping mid-market, heritage brands trading, they have prevented a swathe of empty units across high streets and shopping centres. At the same time, establishing a new era of smaller-format high street department stores means they are able to offer shoppers greater brand diversity in their local towns, either in store or via click and collect.

And their impact on wider retailer diversity across UK high streets should not be feared.

It sounds daunting to use the terms ‘retail giants’, ‘titans’, ‘powerhouses’ and ‘behemoths’, but despite their huge force within the industry, they do not limit the landscape for other strong retailers that have a clearly defined USP.

There will always be a place for independent retailers and mid-market brands that offer a unique in-store experience or product range, providing balance to larger corporate retailers and offering something that can be tailored to their particular high street or shopping centre. New retailers emerging now – if they expand with care and heed the lessons learnt from their predecessors – can do so whilst investing in dual-platform retailing and without becoming incumbered by the same levels of debt and long, restrictive lease liabilities.

Having said that, competition between the retail powerhouses themselves could land some regional landlords with added complexities to negotiate. As these brand houses increasingly take in brands that bring them into more direct competition with one another – for example Frasers Group owning Sofa.com and Next acquiring Made.com – demands for exclusivity in smaller towns could start to ramp up. There will also be change to each retailer’s identity and their offerings will no doubt evolve, evidenced by Frasers’ completion of its deal to buy designer fashion retailer Tessuti, from JD Sports, last month.

But for now, with the strength and stability they offer, these large brand powerhouses are proving a welcome salve for many town centres, ensuring these destinations can compete with online retail by providing shoppers with easy multi-brand access, and helping to keep many cherished British retailing names alive and kicking.