Retail theatre makes a stylish comeback

Forget wind-swept shopping parks and drab supermarkets. The department store, with all its glitz and glamour, is enjoying a renaissance in fortune. By Debbie Davies

Conspicuous consumption reached new heights when shopping met Hollywood glamour and Daryl Hannah arrived on a black horse to open Harrods' summer sale, sampling jewellery that, even after a 50 per cent reduction, was still priced at pounds 330,000. The sale, which started on Wednesday, is expected to attract 200,000 shoppers to spend about pounds 14m.

Harrods' glitzy performance underlines the renaissance in the fortunes of department stores, many of which suffered a shaky Eighties.

There was a time when they were unassailable for luxury and exclusivity. And they have always had that sense of glamour so happily added to by Ms Hannah, star of Roxanne and Splash. Indeed, department stores have a pedigree when it comes to this sort of retail theatre. Back in 1919, Galeries Lafayette, the Harvey Nichols of Paris, offered 25,000 francs to the first pilot who managed to land on the roof of the store. Jules Vendrines, the distinguished First World War flier, obliged, and the resulting media coverage was sufficient to persuade department stores of the benefits of publicity.

Department stores can trace their roots back to the theatrical world of Paris in the mid-1850s when stores such as Le Bon Marche, Printemps and Galeries Lafayette opened their doors to an Art Nouveau-inspired world of stained glass domes, sweeping staircases, grand atria and gilded ironwork. Architecturally they had more in common with the Paris Opera than their predecessors, the street markets, and their style was copied around the world. From GUM, the state department store in Moscow, to Carson Pirie Scott in Chicago, department stores came to look more like civic, even royal, buildings than shops.

In their grand setting, Parisian department stores were the first to offer goods clearly marked with fixed prices. Exchanging and refunding money on returned goods were other department store firsts, as were January sales, and clothes copied from those worn by the most fashionable and made available 48 hours later.

This historical baggage was until recently bad news. City analysts had for years written off department stores, which they regarded as "retail dinosaurs" weighed down by their architecture. But then Corporate Intelligence, the retail analyst, reported the sector achieving 10 per cent growth in sales last year, making it the fastest growing sector in retailing.

If the department store is dead, why was Harvey Nichols forced by sheer numbers of customers repeatedly to close the doors at its new 45,000 sq ft Leeds store; and why are property developers chasing department stores as essential "anchors" for their new shopping centres?

Corporate Intelligence cites the huge sums poured into refurbishing buildings that had fallen into disrepair, as fundamental to the sector's re-emergence. Selfridges, for example, has spent pounds 65m remodelling its store in Oxford Street, London, an investment that Corporate Intelligence says lies behind an improving financial performance.

David Elliott, Selfridges' retail director, agrees that department stores work best when they provide entertainment. "The emotion generated in research focus groups about department stores is tremendous," he says. It is the scale as well as the style of a store such as Selfridges that allows it to stage under one roof grottoes, radio broadcasts, fashion shows and food demonstrations. Mr Elliott says that the mix of activities creates a type of shopping far removed from the way we shop for commodities such as food.

Galeries Lafayette, always a delightful place to shop, works on the same principle. The store knows from its research that the buying habits of its customers are influenced more by attitude and behaviour than by conventional socio-economic factors such as age and income. Of course, that explains why a teenager with the least amount of disposable income shows greatest loyalty to premium brands, while a millionaire may choose to watch cricket through the railings rather than pay the entrance charge. What we spend has more to do with mood and attitude than with our bank balance; and department stores are all about putting us in the mood.

The sector, according to Corporate Intelligence, has proved peculiarly adaptable over the past 150 years. Tremendous changes have occurred in retailing since department stores were invented. Nowadays there are shopping centres, discount retailing and, most significantly, out-of-town retail parks, with the scale, product mix and economics to threaten department stores. Yet they have turned to their advantage the very lack of overheads that come with out-of-town sheds. Toys R Us and the like put up their Meccano frame buildings almost overnight, in the style of the market stall holder. By comparison, department stores continue to plough millions into buildings created a century or more ago by craftsmen and architects such as Majorette, Sullivan and Tiffany.

Undoubtedly, car parking and breadth of product mix have won big market share for out-of-town retailers, but few would deny that their sheds lack soul. Is there an out-of-town retailer like Bentalls, of Kingston-on-Thames, a family-run department store which has staff of 25, 40, even 50 years' service, and a family member as chairman of its club for retired employees?

Corporate Intelligence estimates department stores accounted for 3.8 per cent of retail sales in the UK last year and look set to out-perform the general retail market again in 1997. And they stand to benefit further from rising numbers of older customers, traditionally the most loyal department store shoppers. As Steve Davies, author of the Corporate Intelligence report, says, "Having gambled and invested heavily in their stores in the Eighties and early Nineties, when the future of department stores looked very shaky indeed, the major players are now in a position to reap the rewards of their foresight."