BHS saga shines a light on why retailers fail – and how they might survive
Published 07/07/2016
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 Retailers falling into administration is not, sadly, a rare occurrence – but the unravelling of British Home Stores has been a truly extraordinary spectacle.

It’s fair to say that BHS’s collapse after 88 years was not a complete surprise. Though its homewares still offer some appeal, the retailer’s stores and fashion ranges have felt painfully tired in recent years, with the chain’s plethora of different logos emblematic of a brand that had forgotten what it was for.

Even in Newcastle, where a new and shiny BHS store opened just four years ago, the lack of care has been evident in recent months.

Though BHS collapsed while in the ownership of the colourful Dominic Chappell – the at-least-twice-bankrupt ex-racing driver who bought the business for £1 last year – its troubles have shone a light like never before on the poor decisions, over a longer period, that can tip a company over the edge.

Thus, we’ve had probing questions in Parliament about why Sir Philip Green sold BHS to a man with no retail experience. At the same time, there’s been a growing sense that the cash generated by BHS over the years has ended up everywhere apart from in the pension fund or being invested in stores. In some ways mirroring Woolworths before it, BHS’s sad demise is the result of a lack of love not just over 12 months, but at least two decades.

Post-BHS, future retail administrations are likely to come in for more scrutiny and analysis – which can only be a positive thing. The retail graveyard is littered with the remains of past ‘rescues’, where collapsed chains have been snapped up by the questionably qualified, or even bought back by those involved in the failure.

Little wonder that supermarket Morrisons has acted swiftly to re-employ staff made redundant from the My Local convenience chain that it sold last year, turning potentially unwelcome fallout into a PR win.

And what about BHS itself? Two months on from its collapse, all the 165 stores – including eight in the North East – are continuing to trade over the summer ahead of a planned liquidation, with the 11,000 staff still facing an uncertain future. Though hopes that the entire chain could be rescued came to nothing a month ago, there remains a glimmer of hope that Mike Ashley, or someone else, could save a tranche of stores and the BHS brand.

Indeed, if one thing has emerged from this whole saga in better shape than before, it’s the BHS name.

The chain’s potential exit from the high street has prompted many shoppers to step inside a store for the first time in years, causing a boom in sales, while exposure of all the goings-on has rightly elicited sympathy for the long-suffering staff.

Meanwhile, the post-administration ‘#SaveBHS’ campaign – including the cheeky illumination of the Angel of the North – was BHS’s most inspired and effective marketing in years, and gave a flavour of how the retailer could differentiate itself from rivals as a long-established, bold and proudly British brand.

While the arguments over what precipitated BHS’s collapse – and how to plug that pension hole – continue, we’d better not rule out just yet a slimmed-down and reinvented British Home Stores maintaining a place on the UK high street.

Written by Graham Soult

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