Selfridges is a high end departmental chain store. Its headquarters is located in London. In most of its outlets, it deals mainly with stocks that are in fashion as well as luxury items. It was founded way back in 1909 by Harry Selfridge. The latter was a former employee of Field. The first branch was opened in Oxford Street during the same year of commencement.
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To date, this departmental chain store has undergone further expansions to cover more regions in search for new markets. For instance, latest expansions of Selfridges were witnessed in 1998 and 2002 whereby other stores were opened in Greater Manchester and Birmingham cities respectively.
The name of the store was originally coined by Selfridge who was also the personality behind the formation of the departmental store. He was born in 1857 and throughout his life; he had close interest in the business world. The phrase “the customer is always right” largely reflected the motive and operating slogan of the store.
This was to keep the customer closer to business. The strategy has continued to gain prominence in all businesses all over the world. Currently, the store is considered to be the second largest in London after Harrods (Enstewitle 2009, p.61).
After undergoing catastrophic damages from bombings towards the end of the Second World War, the remaining stores were sold to John Lewis in 1940s and in 2003 it underwent further acquisition by a Canadian firm- Galen Weston- at a net worth of 598 million pounds.
The latter chose to concentrate in innovation of the original store, located in the Oxford Street, over the former’s expansion plans to cities such as Glasgow, Leeds and Bristol among others (Markson 2006, p.17).
Market position: As already mentioned, Selfridges enjoys a significant market share in London bearing in mind that it is the second largest store. It is also regarded as one of the most famous high end chain stores in the world. Its spectacular building design in Birmingham is attractive and thus acts as a potential marketing strategy due to impressive public image.
Historically, the chain store in London has been stocking marvelous art antiques which have been drawing larger numbers of customers. This approach has consciously created a premeditated marketing platform. Its stockings and reputation have also helped it to continue dominating the fashion and luxury industry throughout the past decades. In addition, one of the outstanding motives of the store is to keep customers as closer to the business as possible.
The latter marketing strategy has indeed enabled customer retention by the chain store. Therefore, it is against this backdrop that Enstewitle (2009) argues that the clientele base for the departmental store has “substantially grown and is estimated at tens of millions all over the world” (p.61). Its popularity is also estimated to be in a similar margin but slightly over a hundred million.
Since it is located at the busiest spot in the city of London and being the second largest shop in the city, it stands a better marketing position over its closer rivals. Its award in the 2010, as the best chain store in the world, mounted its popularity and consequently led to acquisition of the best market position in the fashion and luxury industry from former rivals such as Harrods and John Lewis.
Although the fashion and luxury chain store has no evident record to have embraced technology from the very beginning, the adoption of electronic transaction by the firm has been a major step in the right direction since it has enabled it to expand the clientele base. However, it had initially demonstrated unwillingness towards adoption of technology for business especially as regards internet sales.
Consequently, the company faced serious market competition from other players such as H&M, Zarra, Lilywhites and Liberty. It was against this background that the company had to diversify its marketing strategy options and reach out for more clients. Hence, Selfridges had to adopt e-marketing and for sometimes, it had recorded significant growth and increased volume of sales.
Before it could be sold out, the company had experiencing expedited growth in market share which is estimated at 1.4%. This margin was quite small compared to its great rival Harrods’ growth margin of 2.5 which has been consistent for the last seven years (Markson 2006, p.64).
Financial position: After it was sold in 2003 at a net worth of 598 million pounds to Galen, the company’s stock market is currently estimated to be almost doubling the amount it was acquired for in the year 2003. Its financial results for the last six years also attest to the fact that the company is experiencing expansive trends (Johnson 2010, p.52).
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Due to steady trend in growth over the last three quarters of a decade, the chain store has been able to stand at a good financial position. Its ratios suggest that the company is steadily reducing liabilities and increasing its asset base. The decreased financial liability of the departmental store has enabled it to expand at a very rapid rate especially since it was sold out..
Nonetheless, the expedited growth of other market rivals has been a major challenge towards the stability of the departmental store. For instance, a company such as Harrods has a steady growth of 2.1% in market share. Upcoming companies such as H&M are showing better growth grates than selfridge, standing at 2.3. Zarra is also depicting annual growth rates of 1.2 of market share (Smith 2009, p.43).
These worrying trends may pull down the growth rate of Selfridges if strategic measures are not put in place early. The above stores have continued with physical expansive plans and have been able to reach many cities in Europe, raising a threat future existence of Selfridges. John Lewis on the other hand has, since selling Selfridges, shown continuous growths. Lilywhites is also exhibiting ambitious plans and is ready to catch up with Selfridges.
Conclusion and recommendations
It is evident that Selfridges is one of the largest chain stores in London. Its continual growth rate of 1.4 % with a stable market share assure the stores of a better market position and thus better financial position.
Having been sold in 2003 at almost six hundred million pounds, the company has exhibited market and financial stabilities for the last eight years to figures almost doubling the amount it was acquired for.
In terms of recommendation, its shattered expansive plans need to be re-introduced to continue placing the company strategically well in the market. With its strategic attraction techniques acquired from Selfridge himself, the company can expand its products and physical presence to many regions all over the world. When this has been done, Selfridges would be one of the most profitable departmental stores in the world for fashion and luxury.
Enstewitle, J. A 2009, The aesthetic economy of fashion: markets and value in clothing and modeling, Berg, Oxford.
Johnson, R. H 2010, Where to wear in Europe, McMillan, London.
Markson, L. N 2006, Gigantic fashion industries, Prentice Hall, New York.
Smith, J. A 2009, The world and fashion, Sage, New York.