House of Fraser impasse highlights limits of collaboration

The high-end retailer went into administration and was bought by Sports Direct.

This is not the end of the story, however.

What we are seeing now is a scramble as parties seek to maximise opportunity and minimise loss from the collapse.

For example, House of Fraser’s logistics operator XPO Logistics wants to get paid what it is owed, whereas Sports Direct wants to avoid costs where it can.

Equally other retailers are rumoured to be looking to out-bid Sports Direct on prime House of Fraser sites. 

It’s chaotic and it is cut throat. There will be winners and losers. That’s business. It is fundamentally adversarial.

For a long time, collaboration has been championed by supply chain professionals seeking to add efficiency to logistics. This is a brilliant idea and it makes perfect sense to supply chain and logistics managers who are primarily concerned with keeping the machinery of UK plc moving as smoothly as possible.

No one can argue with its logic. 

But business is not motivated primarily by logic. It’s more about chasing profit, and that doesn’t always lead to logical or pleasant places.

Or if you are a logistics business, how far can you go in sharing information and processes with a customer, knowing that one day, they may hit the rocks and leave you arguing over millions in unpaid bills?