Last week was a sad day for retail chain BHS, as the iconic high street retailer admitted defeat in the modern marketplace, entering into administration last Monday. Sir Philip Green – who acquired BHS for £200 million in 2000 and then sold it for a £1 last year – has come under harsh criticism from many who say that he could have done more to help the troubled retailer – which now faces potential job losses of 11,000 across the UK if the stores close for good.
So what went wrong for the 88-year-old high street staple? When Green took the helm in 2000 there were no indications that the chain was in any sort of trouble. BHS had been present on the high street since 1928 and looked likely to remain there for a long time to come. Now in the face of administration, it has emerged that they have been operating at a loss for the past seven years. A failure to respond to shifts in consumer habits following the emergence of online rivals could certainly have contributed to their decline, but for Dominic Chappell – leader of the Retail Acquisitions consortium that acquired BHS from Philip Green – the blame lies firmly with the previous owner as he sensationally claimed last week that he would like to buy the business back.
Chappell told the Financial Times that he wasn’t done yet and would like to “finish what we have started.” He suggested to the Mirror that he would like to buy back up to 120 BHS stores and the fact that the retailer had entered administration felt like “the handcuffs have been taken off.”
However, Chappell is going to have to get in line if he wants to forge ahead with his plans, as so far more than 30 expressions of interest have been offered since the administrators Duff and Phelps moved in last week.
Whilst BHS’ financial shortcomings have clearly played a part in their downfall – there appears to be some discrepancy as to who is really to blame in terms of financial wrangling and a disputed pension deficit – it is clear that BHS’ own retail strategy in a rapidly changing marketplace had a considerable impact on events. In order to survive in the current economic climate, bricks and mortar stores must focus on what makes them special – with strong retail design, personalisation, structured customer journeys or experiences and the integration of new trends in digital technology and data analysis.
Right now there is a glimmer of hope for the BHS brand, in the form of Philip Day – the man behind Edinburgh Woollen Mill and Peacocks. According to the Telegraph, Day has expressed interest in a considerable portion of BHS’ stores – with a view to potentially rebooting the brand with a pared down chain, created from a “smaller, leaner” section of their current 164-store estate.
Lets hope this isn’t the end, but rather a new chapter for the retailer –will BHS make it to 100?