Three giants, three strategies: Evolving retail strategies among the UK’s top players

While many may have spent the summer relaxing, the UK’s leading fashion groups used the period to evolve their strategies, focusing on efficiency, growth and digital transformation. Here is an intricate look at how Frasers Group, Next and Debenhams Group spent the holidays.

Frasers Group: Elevation and efficiency

Frasers Group, the parent company of Sports Direct, Flannels and House of Fraser, first embarked on an Elevation Strategy prior to 2022, the impact of which slowly began to be reflected in its financials. The strategy itself priorities store transformation, property monetisation, financial services growth and both international and category expansion.

1. Optimising store formats

Much of the strategy has involved rationalisation of its store estate, particularly in the way of underperforming formats. As part of this, many House of Frasers stores have already closed, with the retailer’s Nottingham store shuttering in May, while its Lincoln location is due to close in October. Some stores are being transitioned into reimagined department store concepts dubbed ‘Frasers’.

This reflects a wider overhaul at the group, where lifestyle-led retail or ‘elevated’ flagships are taking precedence. Here, immersive experiences like pop-up activations, the diversification of third-party global brands and the integration of Sports Direct spaces intend to drive long-term retail competitiveness.

2. Property portfolio

In a bid of garnering more control over high-value spaces, Frasers is expanding its shopping centre portfolio, through which it is integrating its own banners. While much of the activity for this part of the strategy took place last year, the company has been nudging towards continued growth, this summer eyeing a 50 percent stake in 2M SF Manchester Arndale shopping centre.

3. International growth and sector diversification

Plans for its portfolio also extend internationally, particularly for Sports Direct, which is already growing across Australia, Asia, the Middle East and Europe. Elsewhere, the group is using acquisitions to step into new markets. The most recent development came in May, when Frasers acquired Norwegian sporting goods retailer XXL ASA, rescuing it from short-term liquidity constraints.

Domestically, Frasers is also continuing to diversify its portfolio by exploring sectors beyond fashion. In August alone, the group acquired a minority stake in leisure group We Do Play and rescued electronics retailer Ebuyer from administration. The company already owns either partial or full stakes in Currys, AO World and Evans Cycle.

4. Exclusivity and loyalty

To build on consumer loyalty, Frasers has doubled down on Frasers Plus, a buy-now-pay-later, loyalty and credit platform. In July, the company reported the programme had surpassed one million active users, accounting for 19 percent of UK sales, bringing it closer to its one billion pound sale target.

A similar concept is reportedly being eyed for luxury e-tailer Matches, which Frasers rescued from administration in 2024 and is now said to be preparing for a members-only relaunch.

5. Financial firepower

In July, Frasers announced the closing of a new three billion pounds financing facility reflecting what is said was a strong indicator of support from the banking industry. It came despite a warning from management that FY26 could face at least 50 million pounds in additional costs from government budget measures.

Over the summer, the group posted an adjusted pre-tax profit of 560 million pounds for FY25, an increase of 2.8 percent on the year prior. Revenue declined 7.4 percent, however, with challenges in the luxury market cited among the causes.

Next

While in previous years, Next has been among the acquisition-hungry fashion giants, in recent months it has been more conservative in its approach, instead prioritising a strategy aimed at steady, sustainable growth. For this, its omnichannel platform, marketplace services and tech integration are key.

1. Portfolio expansions

This doesn’t mean Next has entirely halted its acquisition run. Building on a track record of snapping up distressed yet valuable brands, the retailer acquired the rights and IP of Seraphine in July. The deal, valued at 600,000 pounds, will see the maternity wear label integrated into Next’s Total Platform, akin to others in the portfolio, allowing the brand to benefit from the group’s existing logistics, online infrastructure and scale.

2. Conservative international expansion

Next to Frasers’ more aggressive internationalisation, Next is comparatively more conservative in its venture into global markets. Again, this doesn’t mean progress in this respect has come to a full halt – it is simply more measured. This is reflected in selective arrangements with overseas partners, as evidenced by its partnership with e-commerce company Myntra, which was behind the opening of Next’s first store in India. The company is now eyeing between eight and ten additional stores across the region for the first couple of years.

Next is also exploring new markets through brands housed within its portfolio. FatFace, which was acquired by next in 2023, entered the German market last month via a partnership with Zalando. The agreement could see the British label eventually launch into other mainland European countries.

3. Navigating cost pressures, managing margins

Akin to Frasers, Next has also warned of additional costs incoming from changes to UK tax, with a 67 million pound impact forecast. In response, the company has planned operational efficiencies and a 1 percent price increase to protect margins. Other efforts to mitigate headwinds came in the form of an equity buyback programme launched in August, through which the company has set about repurchasing 14.99 percent of its issued share capital.

At the beginning of summer, Next had already reported a strong start of the year, during which full-price clothing sales rose 11.4 percent. In response to the positive results, the company raised its full year pre-tax profit guidance by 14 million pounds, a 6.8 percent increase year-on-year to 1.08 billion pounds.

Debenhams Group

Debenhams Group – which changed its name from Boohoo Group earlier this year – has been undergoing a strategic review since the latter half of 2024. The turnaround is being led by CEO Dan Finley, who set out to prioritise operational efficiency, AI-powered innovation and financial stability, alongside realigning the brand portfolio amid a challenging consumer landscape.

While updates regarding the strategy have come in spurts, the fast fashion group released a more definitive overview in August, detailing progress and next steps, giving onlookers a more complete picture of how the review is evolving.

1. Marketplace model and portfolio simplification

At the crux of the Debenhams Group strategy is positioning its now flagship brand, Debenhams, as the blueprint for wider change. In its latest financial report, the marketplace delivered a 34 percent YoY increase in GMV, and an adjusted EBITDA of 25 million pounds. As such, the group plans to deploy a stock-light, capital-light online marketplace model throughout its portfolio in a bid to drive profitability and growth.

This is part of the group’s wider efforts to focus on profitable operations, a concept that also reflects its continued evaluation of the ‘Youth Brand’ category, a one in which GMV dropped 22 percent in 2024. With this in mind, Debenhams has announced it is reviewing options for the PrettyLittleThing brand, pointing at a potential disposal of the e-tailer in order to accelerate progress.

2. Technology-drive efficiencies

Increased investment into artificial intelligence (AI) and other automation technologies was also prevalent over summer. In June, Debenhams announced a partnership with Peak to deploy AI-driven dynamic pricing across a number of products, while an extended partnership with Amazon Web Services, initiated in July, intends to accelerate the adoption of AI to streamline operations.

AI will also play a key role in upskilling the Debenhams’ workforce. To do so, the company launched an AI Skills Academy to equip employees with practical AI know-how, supporting broader tech transformation.

3. Financial reinforcement

Elsewhere, further streamlining initiatives continue to roll out, much through the closure of non-core operations. The company announced plans to close its US distribution centre and London head office, while its Burnley warehouse is under review, all moves deemed “important for the long-term health of the business”.

Other cost-saving initiatives that were already in place, including a 30 percent workforce cut, have delivered 50 million pounds in annualised savings. In August, the group also secured a 175 million pound debt facility, reducing its debt load to 78 million pounds, further supporting the strategy. All of this helps the group move towards its mission of building a leaner, more financially resilient operating model that is both scalable and has room for investments.