BHS threatens to close 40 stores as the highstreet evolves (not die)
We’ve all woken today to the sad news that BHS is yet again struggling and looking to renegotiate the terms on 40 if it’s 164 stores and threatens to close up to half of them if it doesn’t get its own way.
Darren Topp, the chief executive of BHS said:
The CVA proposal is a necessary milestone in resetting BHS to ensure its long-term future. Some of our stores are loss-making as we are being charged rents that are too high relative to today’s market. The CVA will address this issue.
To quote Nan from the Catherine Tate show – “what a fcking liberty”!!! Yeah, I just (almost) dropped the f-bomb there, take a moment to compose yourself. Let me explain….
You may or may not be aware but last year Sir Philip Green sold the chain off for a measly £1 – and let’s face it, he is a really shrewd business person – there’s got to be a good reason for it. BHS are now exasperated and desperate over their unaffordable rents – but surely the new owners knew that when they scraped their £1 together from change down the back of the settee. There can be no surprise!
BHS is a funny one isn’t it – where does it sit in the market? It’s not John Lewis or Next for your home furnishings, and the likes of Primark are offering a lower cost alternative to what British Home Stores has to offer albeit with a cooler brand perception from the shopping public.
BHS & the Woolworths dilemma
British Home stores are in the same situation that Woolworths found themselves in 15 years ago – they have a desperate need to re-evaluate what their business really is and how it can appeal to the new mentality of shopper that exists. With the more traditional retailers this is possible – Debenhams, M&S and Next have done well at this (albeit with varying degrees of success) and to come away from the sector Argos has proved itself to have been really canny with the way it has started to change it’s brand and take advantage of the rise of marketplaces.
Tesco, Sainsbury and ASDA will all be kicking themselves that Morrisons have trumped them all with their link up with Amazon too – that could be the single-handed thing that saves or kills the beleaguered grocer.
Darren (aforementioned Chief Executive) has said he Living Wage will threaten the retaier (which as members of the Living Wage Foundation frustrates us) – but later this year they may have a very good opportunity ahead of them in the EU referendum. If we vote to leave the EU – British Home Stores could become a prestige brand selling the wares of a nation that has turned it’s back on it’s European brothers. You never know, crazier things have happened.
None of this is the fault of a dying highstreet – it’s not dying, it’s simply evolving.
Let’s see what happens – I truly hope we keep every single BHS store on the highstreet – but they ought not be arrogant about their re-negotiations as highstreet rents start to slowly rise again. The more successful retailers we have in the country the stronger our economy is and that’s good for everyone.
What do you think – are BHS the next Jessops, set for rescue and revival or are the consigned to sit next to Woolies as one of those great British retailers that our kids won’t remember when they’re older?