Do I think the High Street is dead? Well the evidence points to yes

The New Statesman: ‘Was Harold Shipman a good doctor?’, ‘Was Edward Smith a good liner captain?’, and my personal favourite, ‘Was Gerald Ratner a good CEO?’.

Well, I don’t know if that actually appeared in the New Statesman, but somebody on Twitter said it did.

That’s what I have to put up with every day on Twitter, 30 years on from that speech.

The fact that I built the world’s largest jewellers with more than 2,500 shops, making a profit of £125m in 1991; and then went on to start a health club, which I sold for £3.9m; and started an online business with £25m turnover – but that hasn’t reached the ears of the Twitterati.

However, today I am glad I haven’t got 2500 shops – especially after this Christmas.

As I wrote in the Mail on Sunday last year – ‘the High Street is dead’.

Well, is it? Predictions are more than often wrong.

I remember when the Japanese produced the quartz chip that made watches accurate to one second a month – whilst the best chronograph Swiss watches were only accurate to 60 seconds a month.

Everybody said this would spell the end of the Swiss watch industry. In fact, it turned out to be the best thing that ever happened to them, as they had to change and they started concentrating on the design rather than the accuracy. Swiss watches today shout expensive jewellery, which they didn’t before quartz technology was introduced.

The High Street faces the same challenge from e-commerce, but, will they reinvent themselves like the Swiss?

Well, so far the answer is no. Department stores saying ‘we will serve Prosecco and do yoga’ won’t produce the same level of profits, as the High Street has massive fixed overheads that can only be paid for by selling high margin items in bulk.

Another reason why the High Street is not fighting back against online is that the retailers all have an online presence, and are happy to divert their sales online where they make more money.

However, there are exceptions to this. The reason Selfridges sold for £4bn, is that it is upmarket. The shopper who wants a Hermes bag, or a Rolex, can’t get these items online. So, that’s why they’re going more and more upmarket, so as not to compete with the internet. This is the same reason my old company, Watches of Switzerland, is doing so well.

After all, Amazon is a mass-market retailer – if you want to compete with them head-on, you will lose.

Online also has a huge advantage: Algarisms. Information about your customers is everything.

The reason we were one of the few retailers to succeed in the USA, is that we bought a company in 1986 (before the internet) that had incredible systems already in place. With their expertise in data and computers, they knew everything about their customers, and would contact them directly before this practice became commonplace.

So, do I think the High Street is dead? Well, the evidence points to yes.

But I am reminded of the Victorians, who predicted that London would be buried in manure due to the heavy traffic caused by the horse and carts.

So, something we don’t know about yet may come along that will prove us all wrong again.

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