Department stores could provide a valuable source of income for design groups in the future, with the major chains embarking on “unprecedented” expansion programmes and some of the smaller groups expected to merge.
Department stores have increased their market share of all non-food retail spending steadily over the last five years, to account for nearly 15 per cent in 1997, according to a new report by Verdict Research.
Verdict’s findings tally with those from research group Mintel International released in March.
“[The booming market] has led to work for designers in designing new shops and refurbishing existing ones,” according to Mintel retail analyst Richard Caines.
Design groups are also well placed to benefit from brand strengthening in the sector.
“Department store multiples are becoming increasingly aware of their strengths as retail brands and are evolving their propositions to accentuate points of difference,” reads the Verdict report.
However, the future for second division department stores and independents is less bright.
“There has been a continual decline in the second-tier department stores and that looks likely to continue,” says 20/20 development director Yaron Meshoulam.
The Verdict report advises ailing department stores to link together into national chains and trade under a new identity.