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Watson’s Daily: Eurozone fragility and the death of UK department stores?

Eurozone fragility

Europe looks like it’s in a right state at the moment as Germany unveiled its first economic contraction for three years, which has dented the eurozone’s already fragile growth.

Then you have Italy remaining defiant about changing its proposed budget to conform with EU guidelines and now the Swedish Parliament has just rejected a prime ministerial candidate for the first time in modern history!

If you add together economic and political weakness in the eurozone’s biggest economy, the destabilising influence of a returning wave of populist, anti-immigration parties in continental Europe and couple that lot with Brexit and the mother of all trade wars with the US and China, things are looking pretty shaky for the Eurozone at the moment.

It remains to be seen whether Theresa May can take advantage of the bloc’s weakness in Brexit negotiations, though!

Department stores

I also wanted to mention department stores today.

Most of you will know that my overall opinion of department stores is that, in their current form, they are an anachronism destined for terminal decline UNLESS they adapt more quickly to changing customer behaviour.

Sports Direct’s Mike Ashley just announced that he’d be shutting down four additional House of Fraser stores because the landlords wouldn’t accept new lower rents and then Debenhams’ share price cratered by 21% in trading yesterday on news that its suppliers were abandoning it.

In contrast to all this doom and gloom, America’s Macy’s announced strong sales growth for the quarter and cited store renovations, a new discount concept and additional services as reasons behind their success.

I think Macy’s is an example of what is possible – even for department stores – when you listen to and adapt to changing customer behaviour AND CONCENTRATE ON ENHANCING THE EXPERIENCE!

According to research from GlobalData Retail two-thirds of Macy’s customers rate their shopping experience with them as good or very good – up from 59% last year – so competitors and other department stores worldwide would do well to take note.

Peter Watson

Peter Watson founded Seiha Consulting, a career transition consultancy, after working in HR and four recruitment agencies. He was also a stockbroker for 13 years in London and Tokyo, advising some of the world’s biggest financial institutions on European and Japanese stock market investment. He started writing the Daily (previously known as “Watson’s WIFI”) to help candidates prepare for interviews – but soon found that many others wanted to read it as well!

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