Debenhams Australia: Empty shelves as closure of Melbourne store nears

June 2024 · 6 minute read

Super schmick, shiny and centrally located, it was the overseas department store that was going to make the lives of the bosses at Myer and David Jones, already busy with their own retail woes, even harder.

But now its shelves are almost bare and customers are rare. The in-store cafe is closed and staff wait for someone to serve.

Shopper Susan, one of the few, scans a few lonely-looking scented candles.

“It’s a bit sad, really. Look at the state of these shelves, I can’t really see it lasting until Christmas,” she tells news.com.au.

“It’s Debenhams now but it will be David Jones later. With all the online shopping it’s difficult to see them surviving either.”

Debenhams will be a familiar name to anyone who has travelled to the UK where they are a mainstay of shopping centres and high streets.

Founded in 1778, Debenhams has been supplying Brits with reasonably priced clothes and homewares ever since.

And just like department stores in Australia, it’s found the recent going extremely tough.

RELATED: Opening of department store part of retailer’s ambitious expansion plans

Earlier this year, the company revealed an almost $A900 million loss as it closed underperforming stores and said it would go into administration.

But ominous warning signs had been floating around Debenhams for years. Which is why it was a surprise, in 2016, when it was announced the brand would be opening up to 10 stores in Australia.

Under a franchise agreement, South Africa’s Pepkor would bring the store initially to Melbourne. It would be a more up-market option than Pepkor’s existing Best&Less and Harris Scarfe outlets.

Then-Pepkor Australia chief executive officer Graham Dean said Debenhams was one of the world’s “most credible department store” brands.

“In bringing Debenhams to Australia, we will distil the best of Debenhams’ expertise into a designer department store whose range is especially curated to suit the Melbourne CBD shopper,” he said.

Opening in September 2017, it would carve out a niche for itself by being a “department store for the digital age”, Mr Dean said. Customers would be able to order clothes to try on via an app so they were ready and waiting in the fitting room, for instance.

For its first store, Debenhams chose Melbourne’s snazzy St. Collins Lane, a revamped centre on one of the CBD’s smartest streets.

But the shoppers just did not materialise.

LOCATION, PERCEPTION, COMPETITION

Part of the problem was perception. It may have been sold as a “designer department store” but Debenhams was distinctly middle of the road. More Myer than Madison Ave.

If you wanted mid-market, well Myer’s Australian flagship was a mere block away.

Its location, between Bourke St and Flinders St Station, may have seemed ideal but many shoppers shunned St. Collins Lane and chose to walk through the historic Block Arcade next door. In doing so, they completely missed Debenhams.

It was also small — a single floor compared to the many at its competitors.

In July, Pepkor Australia, now called Greenlit Brands, announced Debenhams’ Australian adventure was coming to an early end in January 2020 with just a single store ever opened.

Visiting it recently, Debenhams looked like it would run out of stock far before January. Then again, the lack of customers perhaps means whatever is on the shelves may remain there; collecting dust.

EMPTY SHELVES

Not all the displays were empty; but many were. In the perfume department, shelves branded with the Chloe fragrance logo were bare, bar a few boxes. It’s the same for Estee Lauder where the side of a large concession sported precisely zero products.

Fashion was more fruitful in terms of stock, but even here it looked as if items had been spaced out to fill the area. A Van Heusen menswear display, which might have sported shoes and shirts, displayed nothing.

There were shoppers but not many of them. On a Friday afternoon when news.com.au visited, perhaps 15 people wandered in and out within 30 minutes.

A cafe to one side had bar and chair stools in place, there was some boxes of tea, but the fridge was empty and not a person, staff or shopper, could be seen.

Tables where tired shoppers once revived were now strewn with boxes of English lollies and treats. The lights were off, the till was closed.

A jaunty red London phone box took pride of place in the cafe, but like the rest of the store, there were few customers to see it.

Greenlit’s new CEO Michael Ford said Debenhams’ UK woes led it to pull the plug on the brand in Australia. But the reality is, it never struck a chord here.

‘I SPEND AS LITTLE TIME HERE AS POSSIBLE’

Susan was exactly the customer Debenhams wanted. She was excited about it coming to Australia and had even joined the loyalty program. But ultimately she was underwhelmed.

“I got some bargains. But it’s a bit of a mish mash and it didn’t really bring anything new,” she said.

“It’s not really in a visible area and there’s no phone coverage. I don’t like being uncontactable so I spend as little time here as possible.”

With many of the shelves bereft of things to buy, she said she struggled to see how Debenhams could remain open until January. It would have nothing to sell by then, she said.

Retail consultant Brian Walker has long been blunt that Debenhams should never have set up shop in Australia.

“I was surprised they even came into the country in the first place,” he told the Herald Sun in July.

“It was a little hard to find and it was relying on being a destination.”

But department stores were no longer destinations, he said.

“Those (retail) models have largely lost the very point of difference and focus they once had,” Mr Walker said.

MYER AND DAVID JONES

Executives won’t mourn the passing of Debenhams; it’s one fewer competitor to worry about.

However they may be concerned that it is yet another retail canary in the coal mine reminding them of the uphill struggle in attracting customers back into stores.

David Jones is busy reducing its floor space. Within the next few months it will have squeezed its two Sydney CBD stores into one; last week it announced the sale of one of its two Melbourne CBD stores.

DJs, owned by South Africa’s Woolworths Holdings, is hoping ritzy refits will make it the first choice for big-spending shoppers.

However, just last month, Woolworths (not related to the Australian supermarket of the same name) said Australia was in a “retail recession” as it marked down the value of David Jones by $A437 million.

Under new CEO John King, Myer has been making some progress and has increased its year-on-year profit by 2.2 per cent for the year even as sales slipped 1.3 per cent.

The firm has closed stores but, like DJs, its preference is to shrink the stores so it can save on rent.

For Greenlit Brands, closing Debenhams helps it focus on its Best&Less and Harris Scarfe stores as well as subsidiaries Freedom and Fantastic Furniture.

Speculation is that Greenlit will eventually sell off the various parts of its business and disappear as a company. Just like its Debenhams store in Melbourne that is slowly fading away before customers’ very eyes.

News.com.au contacted Greenlit for comment.

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