Retailer BHS files for administration as customers desert
Out of fashion UK retailer BHS is going into administration today (Monday) threatening 11,000 jobs. Talks are continuing with Sports Direct to buy some of BHS’s 164 stores but it is understood any buyer would only do so if it did not have to take on its £571m pension deficit.
Last year BHS was sold by the entrepreneur Sir Philip Green for £1. He had bought it for £200m in 2000. Its new owners, Retail Acquisitions, said they would deliver £160m of funding to help turn around the fortunes of the chain, but have not been able to raise the sum.
Shopworkers’ trade union Usdaw said it was “seeking urgent clarification from the company”. It also called on BHS to begin a dialogue “at this difficult and worrying time for staff”.
The loss-making chain store was bought by a little-known collection of financiers, lawyers and accountants with no retail experience. Last month the brand was rescued from the brink after creditors voted to accept a cut in the rent bill for about half of BHS’s 164 stores.
BHS simply didn’t change – or at least didn’t change fast enough – while retailers all around them did. Britain has the most competitive and dynamic retail environment in the world, which attracts shoppers globally. Consumers here expect more, and they get more from nimble players such as Primark, Zara and M&S.
BHS could also have changed a decade ago – as online shopping came to the fore – but it missed that boat as well. So, barring a last minute miracle, BHS will have new owners soon.
But in the worst case scenario it will go the same way as Woolworths and Comet and disappear from the High Street.
When the deal with landlords was approved in March, chief executive Darren Topp said he wanted the British public to give BHS a “second chance”. “We want to make it an iconic British brand again. We would like the British public to give us a second chance. Come and see our stores and you will be surprised,” he said.