How Will the Closure of House of Fraser/Rackhams Affect Birmingham?

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House of Fraser announced yesterday that it plans to close 31 of its 59 stores across the county, including Rackhams in Birmingham. Professor John Bryson talks about what the closure will mean for Birmingham.

Retailing matters for local economic development. It creates local jobs for local people and prevents money from leaking out from a local economy to support retail workers located elsewhere. There is a long held view that services like retailing are non-basic activities: they function in the local or regional economy as support for the basic goods-related activities that are engaged in interregional trade and which generate the revenues (taxes, employee’s incomes) that create the demand for services. Take away the basic goods-producing activities and the demand for services will contract accordingly. This view is incorrect. Retailing encourages consumer-led tourism that attracts people to places that have a distinctive retail mix and prevents some retail spend from going elsewhere.

The retail world has been experiencing a moment of rapid technological disruption with developments in e-commerce and alterations in consumer behaviour. The history of retailing over the last ten years has been one of bankruptcy, closing stores and complete chains and an on-going process of restructuring. The proposed closure of House of Fraser in Birmingham in 2019 will bring to a close 128 years of history. It will create some temporary unemployment, but it will do three other things. First, reduce the quality of the city’s retail mix. Second, remove one of the major attractions that encourage shoppers to go beyond the Bull Ring and Grand Central. Third, leave the city with a very large empty building that will need to be repurposed.

What will happen to the House of Fraser building? This is the largest House of Fraser Store outside London. The building includes nearly 500,000 square feet. An empty building of this size will be a major problem for this part of the city. But we must remember that we have been here before with the closure of BHS and C&A. We should also remember the short visit that Beatties made to the city.

Such a closure is a major problem for the commercial streetscape that is part of Corporation Street and the link to the Great Western Arcade. One assumes that this will be a major property development opportunity with offices or apartments replacing retailing above the ground floor and the ground floor is transformed into a form of experience or entertainment space. The key issue is to ensure that something positive happens to this site as its position in relation to Corporation Street and the Cathedral makes this building an important part of Birmingham’s urban environment.

This blog was written by Professor John Bryson, City-REDI, University of Birmingham.  

You may also be interested in our recent blog “The 2018 Retail Crisis Catches Up With Marks and Spencer“.

Disclaimer: 
The views expressed in this analysis post are those of the authors and not necessarily those of City-REDI or the University of Birmingham.

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Author: John Bryson

Professor of Enterprise and Competitiveness, City-Region Economic Development Institute, Birmingham Business School, The University of Birmingham, UK

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