The BHS/Sports Direct Westminster soap opera: chapter two

EDITOR'S BLOG: Nobody said UK retailing was like a game of afternoon whist at the Godalming WI. It's dog eat dog.

by Matthew Gwyther
Last Updated: 15 Jun 2016

We may be be a nation of shopkeepers but whoever thought the complex ins and outs of Sports Direct and BHS would lead the headlines for nearly a week? In the extremely odd arena of the palace of Westminster, a select committee has been poring (and pawing) over the mishaps and failures that have occurred in a pair of UK retailers which, quite frankly, lack the sex appeal of Harvey Nicks or Net a Porter.

People actually appear to be rather interested in what has gone on. Suddenly dealing with the grim economics of leakage, i.e employee theft and the resultant queues to clock off via security, are the talking points of the nation.  

How one of the UK’s never-really-premiership retailers (BHS) finally ran out of runway and ploughed into the grass, and how one of the country’s most successful retailers (Sports Direct) got on the wrong side of the unions and certain members of the chatterati offers plenty of meat for analysis. As a hack who is supposed to be interested in and even cheerleading UK business it is difficult to know what to think about this. It has been a true warts and all few days.

Mike Ashley, it was agreed by the chatterati, had a game of two halves. Stumbling and resentful in the first 45 but then blossoming into bluster and frustration that seems to have won certain watchers over to his cause. He was the tycoon with too much on his plate. How could he know exactly what was going on on every corner of his empire, not least the lavatory in which one of his stock pickers is said to have given birth?

When things go wrong in business I’m usually inclined more to the ineptitude/cock up than conspiracy school of judgement. Philip Green knew he had a turkey on his hands with BHS for years. But a combination of pride and lingering machismo stopped him throwing the towel in. And when he did sell it, it is now clear he wanted to remain in the ring. Whether to defend his reputation or benefit from a property carve-up isn't clear. 

Sports Direct is having a hard time too but at least it survives to fight another day. BHS is history. Surely the point is that very little could have been done to avert disaster at BHS. It was a matter of making the best of a very bad hand. The department store has almost certainly been doomed for many years. It just wasn’t a sharp enough, sufficiently well defined operator in a cutthroat sector that will see a lot more blood spilled before it stabilises. And Darren Topp was no Andy Street or Justin King. Chappell is at best a joker and a worst a seriously nasty asset-stripping piece of work.

People will say that none of this has presented business in a very positive light. Well yes but nobody thinks that UK retailing is like a game of afternoon whist at the Godalming WI. It’s dog eat dog. Even at Waitrose. There is a very ugly mood out there. Eleven thousand people have lost their jobs. Frank Field and his committee can now get on with further showboating and have summoned both Michael Sherwood of Goldman Sachs and Richard Caring to appear in front of them. There are few things the public would like more than to see eye whites of the great Goldman vampire squid, which remains a mysterious subject of great fascination, rarely emerging from the deep.

I suspect what will emerge will be more heat than light. MPs on committees, however well meaning, are not barristers. A barrister dissecting her way down through to the truth would never during a cross examination ask a witness whether he thought he was ‘a kind man’. What kind of answer was expected to that question? You show somebody isn’t a kind man - if that is what you seek to achieve - by asking questions that show definitely in the way they are answered that there wasn’t much kindness apparent in a line of behaviour.

I don’t think Richard Caring, Philip Green or Mike Ashley are especially ‘kind’ men. They may entirely lack the milk of human kindness. But maybe kindness isn’t what they are there for in the same way as kindness would not have helped Muhammed Ali much in the ring. The select committee soap opera will continue this week but has no teeth to achieve much. If any laws have been broken then let the law take its course. The precedents are not good here. The law didn’t even get out and out criminals like Robert Maxwell before he’d caused complete havoc.

Intervention needs to happen at an earlier stage, while there is something there to preserve. There is a lot of energy being expended when it’s far too late to do much. However having a senior mandarin at the Department of Business or even the Treasury deciding on the merits of Dominic Chappell as ‘a fit and proper person’ to run BHS is a joke.

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