The great restructure

Since the financial crisis first broke in the UK we’ve seen the demise of a number of high street brands. The recession has been a catalyst for restructure with the retail sector.

There have been a number of factors at work:

Online retail disrupting offline business models – Brands from Blockbuster to HMV have been disrupted by the immediacy of digital media and in the case of HMV a withdrawal of catering to local needs in the bricks-and-mortar stores. Record groups like Rough Trade and independent shops show that there is a demand for media artifacts – but not a sufficiently large one to support large corporations. Other sector beyond media such as clothes and brown goods have also suffered from online competition notably DSG and Comet.

Changing demographics – from Mrs Thatcher’s we are all middle-class to a shrinking middle-class seen across the developed world. Outside of London; city central districts are changing. I have noticed the difference during my trips back to Liverpool, first we saw a consolidation of department store brands, then the disappearance of many mid-market brands.

What is also interesting is how traditional value-orientated brands like Woolworths, Ethel Austin and Littlewoods fared. Their competition was not only discount stores like Primark, but informal sellers on eBay as well. So they went under.

Now this process is being exasperated by the UK banking system woes, but this only accelerating what would have happened over a longer period otherwise.

More information
HMV to sell famous Oxford Street store | The Guardian
UK malls use Google in desperate stab at luring shoppers off the web • The Register
Blockbuster goes into administration – Brand Republic News
Surprise UK retail sales drop fuels triple-dip recession fears | guardian.co.uk
HMV and Republic: are administrators ruining the value of websites? | Econsultancy
Who’s Gone Bust in January 2013 – Centre for Retail Research, Nottingham UK