BHS faces administrators with 11,000 jobs at risk
It appears almost certain that the 88 year old high street retailer BHS will go into administration at 11.30 this morning.
The high street remains in trouble with Brantano who went into administration early in January but BHS with debts in the region of £1.3 billion (£571 million of which is a pension fund shortfall) will be the biggest high street callapse since Woolworths in 2008.
BHS is a company which many will remember their parents shopping in, but which hasn’t changed in the way that competitors such as John Lewis have. Their stores still feel like their stuck in the late seventies and they’ve faced increasing competition with the likes of Primark (who don’t even sell online) and more up to date store like Debenhams and John Lewis who embrace ecommerce and have modern stores.
When was the last time you shopped at BHS? Have you ever visited their website? For many UK shoppers the answers will often be no and that’s the root cause of the BHS downfall.
BHS is a brand we used to love but they were sold for just £1 with over £200 million of debts written off last year to Retail Acquisitions. It appears that they’ve been unable to raise the funds needed to turn BHS around.
It was always going to be a difficult task to turn BHS into a retailer that today’s modern shopper wants to visit. If you want ultra cheap fashion then Primark has oodles of cut price clothes, if you have bigger budgets then Zara is just around the corner. Similarly for the home if you’re cost concious then there’s TK Maxx and if you’re more affluent then John Lewis with their block buster TV ads and “Never knowingly undersold” promise are their to tempt you.
We all love our high street institutions and let’s not forget the 11,000 staff who work at BHS. To see yet another name disappear from our high street will be devastating. It comes down to consumers though, do enough people want to shop at BHS and the answer appears to be no. Commerce has changed and BHS hasn’t been able to evolve fast enough, hasn’t embraced the Internet quickly enough and newer fresher stores have taken their customers away.
I know exactly the last time I was in BHS. It was earlier in the year and I was buying a pair of pillows.
Went off to find the till and it had a massive queue and only one member of staff serving. I ditched the pillows, left the shop and bought them on Amazon.
Probably a couple times in the last year, once just to walk through to other store. There was no visible change to bring in customers in again.
Was there yesterday on our yearly pre holiday shopping trip with the wife. Whilst she was trying clothes on and before I realised the financials reported today, I did wonder how places like that survive in this economy, the staff were working hard tidying up and moving rails around etc but rows and rows of stock just laid out with very few customers and the Leeds city centre rents to pay..
Lots of other high street business like it are proped up with debt and I only see a future for the most diverse high street businesses that do online as well and even then there is huge pressure from mobile shopping and Amazon who continue to innovate faster shipping and broader range of items for delivery
My town is full of empty units but they’re still asking 36k pa rent for a small shop in a very central location. Unless you’re a jeweller selling diamonds (we already have about nine) Who’s gonna afford that
The rents are one thing but the rates and service charges are the real killer to city centre shops