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The Collapse Of BHS Must Be A Lesson to All Retailers

30/08/2016 14:57

The past few months have been incredibly hard for millions across Britain. No, I'm not talking about Brexit-fuelled austerity, yet. Rather, the merciless collapse of BHS. Yesterday, the shutters came down for the final time, 88 tumultuous but largely respectful years of retail history wiped out. Perhaps a more graceful departure would have provoked less emotion.

The final demise of British Home Stores really began when somewhat ostentatious Sir Philip Green bought the firm in 2000, merging it into his Arcadia empire along with Topshop, Dorothy Perkins and Burton. Things were never all-well-to-do under Green, but somehow the firm endured the 2008 recession and limped through another eight years. The end was certainly in sight when in 2015 Green sold the firm for an insulting £1 to retail novel Dominic Chappell, sixteen years of mismanagement and greedy money-grabbing from the top culminating in crumble.

The pride so many in Britain take from British Home Stores was evident yesterday as staff and consumers alike walked out for the final time. "I've come especially this morning - I don't know why - just to say how sad I am at its closing. Sorry BHS," sobbed one local to the BBC outside the St Albans branch, one of the final 22 stores to close.

Perhaps the most haunting words came from Simon Prager, a BHS worker of sixteen years, who told BBC News: "I think there probably was anger at some point in the last three months. But I think everyone's well beyond that. And I think it is now just sadness that it's come to this."

It is all incredibly sad, and massively sensitive. Not only have 11,000 loyal BHS workers lost their jobs, but they have been left with slashed pensions as a result of the £571m deficit caused by Green and co in the echelons of the firm. Quite rightly, a joint committee of MPs recently labelled him the "unacceptable face of capitalism," although Green himself was more concerned with an MP staring at him.

The vocal Labour MP Frank Field, chair of the Work and Pensions Committee which investigated BHS, told the Mail on Sunday yesterday: ""A number of bulldogs have firmly got their teeth into Sir Philip's backside, and there they will remain until a cheque is produced."

I'll be honest, BHS meant little to me. It was beyond my generation. But the way Green shrugs his shoulders, heads off on holiday at his workers' expense, and hounds a Sky News reporter for asking him a question about the pension black hole he has created, whilst he bathes on white sands - it disgusts me. Whether legally correct or not, I've resulted to eclipsing the 'Sir' from his title - frankly, if his knighthood were to remain it would be a disgrace.

So what went wrong? Well, the Parliamentary Committee has honed in on the fateful fiscal strategies employed by Green, but we haven't heard so much about the fatal flaws of the business model.

As the 21st Century digital age has gathered pace, the high street as an entity has been in gradual decline. The younger generation of today and those of the future have largely ditched the shops for online shopping as a far more efficient and often cheaper alternative, both in goods and travel costs.

Green had begun to explore online shopping, but was way behind his rivals such as Primark, Debenhams and Marks & Spencer, but ultimately this was flawed from the beginning. As YouGov analysis found in March 2015, "the quintessential BHS shopper is a woman over 50 years old." So, then, the largest demographic to shop at BHS is the demographic least likely to shop online.

You see, the image of BHS was historical. As the eagle-eyed observer may have noticed, the most vocal about store closures yesterday were the middle aged and elderly; these generations had grown up without a trace of the internet, and so to them the firm belonged on the high street, not the web, meaning the more sustainable alternative of moving BHS solely online would have done little to satisfy its target market.

So, without a reputable presence online, those at the top of BHS had to fight a lone battle on a declining and increasingly competitive high street. But the apathy of Green to adapt to these major shifts in retailing left the whole company fighting a losing battle, and Green's carelessness in selling the business to the hopelessly inexperienced Chappell nipped in the bud any hope of turning things around. Frankly, by then - 2015 - it was too late anyway.

Those left standing, and booming, on the high street today - the likes of John Lewis, Hollister, Primark, Superdry, Next and, ironically, Green-owned Topshop utilise bright lighting, bold branding, quirky layouts, funky features and niche details to stay afloat. In contrast, a gander in a BHS store confirmed it all. The musty air, the drab, dated colour schemes, the 50-years-passed store layouts, the branding - it was a travesty, and in this form would never have survived.

Ultimately, the collapse of BHS rests mainly in Sir Philip Green's hands, not only because of what he did, but crucially what he didn't do, leaving BHS drowning in today's retail ocean.

I think the question we should all be asking now is who's next? I look at Marks & Spencer and see a business that is heavily imbalanced. The Food Hall is incredible, as is the Homeware department, but the dated clothing section - currently a pivotal part of the M&S business - tries to appeal to too many ages, and it just doesn't work. Without the Food Hall and Homeware, it would be less Marks & Sparks and more Marks & Darks.

And then there's Debenhams. It rather fits my description earlier on about BHS - stale air, old-fashioned layouts, hideous products... Perhaps that will explain why it's hard to find a customer in there nowadays. Certainly if this business is to survive, it will at some point in the near future have to move almost entirely online.

So, what legacy can British Home Stores leave? Well, a flashback to the post-war years reveals a BHS in full splendour. Why? Because had got it right. And this is it - BHS is a lesson to all retailers that failure to keep pace with the changing tide of retailing can destroy a business that took decades to build, in months.

See more from Ewan here

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