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.