Would You Get On A Boat Sailing Nowhere?

As I recently learnt, I’m a Xenial (no its not new religion, it's somewhere between Gen X and Millennial) being brought up without computers till teens and a phone as I got to college, I look back at Debenhams with a childlike fondness. Weekends being dragged around by my mum and countless smelly coffees sat on plastic benches in the cafe areas, occasionally having sausage beans and chips on a Saturday for a treat (probably blue cross sale time!)

However, it’s no surprise today that the behemoth of Debenhams is (potentially) going to be in administration later this evening. Whilst it saddens me to see another company that size and historic disappear I hope it can shine a light on the shoddy or rather poor moral practise that was exercised on it by the Templeman and Co back in 2003-2006.

Whilst I’m sure it will have all been above board as Templeman is a self declared "buy out specialist”, delving into what happened saddens my heart, and just because something is legal does not make it right or just. 

Bryan Roberts, an analyst at Planet Retail said it pretty bluntly…

“(By the time Debenhams) exited private equity, it was swaddled with debt, its property had been sold and its performance was dismal.“

And a lot of cash had been extracted into the hands of its new private owners. But for now, let's move on, as thats not my main point.

Even without this, Debenhams business model as a retail store giant, had not changed in decades. It’s concession based system had grown to include some branded cafe’s inside but in a world where onlineness (the being of doing online) is becoming ever increasingly the norm, why would shoppers traipse around 300,000 sq foot store full of escalators (that always seem to want to take you deeper into the store) and items grouped by brand so even if you just wanted a t-shirt, unless you had a particular brand in mind, it takes you even longer to look at a few options before you can decide. NOTE that last year only 15% of Debenhams sales were online. 15%! Whilst its positive that there is room for growth, its worryingly clear that most its eggs in the basket rely on customers walking into store, most likely on Saturday, through slowly decaying high streets.

If you cast your mind back to the early 2000’s. the internet was just getting going. Who’d have thought that 10 years later it would change the game so much.

Now cast back to early 2010’s, the iphone was only 2/3 years old in 2010, who would have thought phones would account for more than 50% of retail sales.

In less than 260 days exactly (if you read this today) we will enter a new decade, 2020 and beyond. The disruption in this decade with be greater and occur in less time, so a company, operating with a business model than hasn’t visibly changed since I was a child, it is absolutely no wonder that the demise and fall of Debenhams (and BHS, with so many financial and business model synergies) has occurred.

If you always do what you’ve always done, you’ll always get what you always got.

We need radical, agile thinking in times like this to adjust the course of a big ship, especially if that ship has holes and is sinking.

Personally, I’m watching a few other large ships at the minute, there is still time for anything to happen. If the seas you sail in have been getting more and more rough, maybe it’s time you traded in your ship for a rocket.

For more rocket ships...see here