The British high street is an ever-changing tapestry, and it seems that no brand is ever too big to fail.
Indeed, if you wound the clock back 20 years and visited your local town centre, you would probably see stores such as Woolworths, Comet, and Dixons. Yet, save for a couple of shops that are few and far between, you would be hard-pressed to find one of these brands today.
Recently, the same has been true for more high street behemoths. At the end of last year, Wilko was forced to shut 400 of its shops. Then, in February, high-street cosmetics and skin care retailer The Body Shop went into administration. We saw in April that clothing giant Superdry is on the verge of administration, too.
The business landscape over the past couple of years has certainly been unforgiving, with decreased high-street footfall and increasing costs. But, these businesses also made fundamental mistakes that led to their demise, each acting as a cautionary tale to other companies.
Of course, there are multiple reasons for the failure of these different companies, and it is not as simple as finding a root cause for each. But even so, you can learn a lot from the mistakes of others to help you avoid a similar fate.
Find out some of the reasons why these popular brands have found themselves in this position, and discover a key lesson from each that could help you run your business even more effectively.
Wilko failed to adapt to changing times
When it launched in 1930, Wilko was somewhat unique in its offering. Initially a hardware store, the brand became well-known for selling low-cost household consumer goods. From kitchenware and everyday staples to garden equipment, Wilko became a popular shop thanks to its wide range of products.
There are various reasons why Wilko ultimately had to close 400 of its stores. In particular, the company failed to differentiate itself from other low-cost retailers that came to the forefront, such as Home Bargains, B&M, and Poundland.
However, perhaps most significant of all was the lack of investment in a digital presence. Wilko relied heavily on footfall to its physical stores, a strategy that worked for many decades of its existence.
But shopping behaviours have changed drastically since 1930. Many consumers now prefer shopping parks outside of towns that have accessible parking and a greater range of shops they want. Over time, the expensive high-street locations that Wilko had prioritised became a lot less attractive.
Additionally, Wilko failed to successfully adapt to the internet age, and its website offering was not as comprehensive as what you could find on the shelves.
Online shopping has become the default way that many customers choose to shop, with the Covid-19 pandemic accelerating this drive. As a result, Wilko was no longer the default choice for customers looking for home goods.
Lesson 1: Be adaptable and actively seek new opportunities
For your business, the lesson to learn from Wilko is the importance of adapting to the modern marketplace. An innovation such as the internet was paradigm-shifting for many businesses, so make sure that you are on the lookout for similar opportunities that can improve your ability to reach customers and clients.
Similarly, it might be worth reviewing your current ways of working, and perhaps looking at where you can improve efficiency and reduce costs.
While you might not have the expense of prominent high-street locations like Wilko did, there may still be opportunities to cut back on unnecessary expenditure when you look closely at your processes.
The Body Shop did not improve its offering in a crowded marketplace
One of the pioneers of ethical, sustainable, and animal-friendly beauty products, The Body Shop is another casualty of the high street. After almost 50 years of trading, its owner, a private equity firm called Aurelius, announced plans in February to close 75 stores and cut staff at the London headquarters by around 40%.
The Body Shop may survive in some guise after the administration process is complete. However, it is less than a positive sign for so many of its stores to be closing down.
As with Wilko, there are many different reasons that The Body Shop has found itself in this position. The sale to French giant L’Oreal in 2006 in particular may have hurt The Body Shop and its image as an ethical provider, which may have made consumers think twice about where they would spend their money.
But one key issue appears to be the failure to keep innovating as the ethical beauty marketplace became more crowded over time.
Companies such as Lush have become more prevalent in the ethical beauty space, offering a sleeker brand that might appeal more to younger customers.
Similarly, new brands have cropped up that offer a more innovative or captivating service, particularly online.
Many celebrities now have their own beauty lines, using their pre-existing platforms to hook consumers. Furthermore, others use technology to offer unique, personalised products.
It seems that, among other factors, only focusing on what it did already and failing to offer a unique selling point to consumers turned out to be a serious issue for The Body Shop.
Lesson 2: Differentiate yourself from your competitors
If you want to avoid the same fate as The Body Shop, it is crucial to show customers or clients why your business and product or service is unique.
There are many ways to differentiate yourself from your competitors. From having a comprehensive, integrated, and distinctive plan to market your product or service, to going back to the drawing board and finding ways to make your offering even more competitive, you can gain the edge over similar businesses.
In the case of The Body Shop, one of the mistakes the brand made was that it may have potentially rested on its laurels. Always keep innovating in what you offer and how you present it so that clients or customers have a reason to always choose you.
Superdry shows the importance of careful and considered succession planning
The latest big brand to find itself in the clutches of a crisis is Superdry, the English clothes retailer producing American vintage-style apparel with Japanese-inspired graphics.
Superdry started out in 2003 after mergers between two other businesses, and enjoyed a meteoric rise in the mid-2000s as its clothing quickly became a status symbol among the youth demographic.
But, turbulent leadership has since seen it struggle. In particular, a crucial turning point for Superdry appears to have been the decision of chief executive officer, Julian Dunkerton, to hand over the reins to a new chief, Evan Sutherland, in 2015.
Dunkerton was one of the founders of the company, having merged his own business, Cult Clothing Co, with two other businessmen. So, when Sutherland took over, it presented a big shift for the business.
After a period of turmoil, Dunkerton returned to his role in an attempt to breathe life back into the company. Unfortunately, despite various efforts including a second flagship collaboration with actor Idris Elba, the company continued to struggle, with Covid-19 and the more recent cost of living crisis causing the company to be on the brink of administration in April.
Lesson 3: Create a clear succession plan early on
It is hard to say for sure whether Superdry could have avoided these issues had Dunkerton more carefully planned his exit from the company. But one thing is for certain: having a succession plan is crucial for the future of your business.
Many business owners are integral to the success of the companies they have built. This is a significant benefit when you are building your business, but can become an issue when you seek to leave it.
So, it is worth creating a succession plan early on. Think about how you would like to exit your company, whether that is passing the reins to family, selling to a third party, or just reducing your activity while remaining involved in some way.
This succession plan can change over time if your wants or needs shift. The key is having a clear plan for what happens next. Otherwise, as it appears may have happened with Superdry, you could put the business in a difficult position when you take your knowledge and experience away.
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Please note
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
