Credit: Mtaylor848/Wikimedia

Why BHS has gone into administration

The chain is another nail in the coffin of the mediocre mid-market

by Jack Torrance
Last Updated: 29 Apr 2016

BHS got a new logo after Philip Green sold it for a £1 last year, but you could be forgiven for not realising it. Even the signs above the doors at its flagship Oxford Street department store are still adorned with the old tag.

That’s probably because it has been in discussions about subletting the store to two other retailers. But for a company that was supposed to be in turnaround mode, it’s a pretty sloppy approach to branding.

Today a group of journalists and camera operators are gathered underneath those signs, hoping to gauge customer reaction to the news that the chain has just filed for administration. Its buyers Retail Acquisitions Ltd, led by former racing driver Dominic Chappell, have struggled to get the business back in shape. Despite the respite provided by its landlords last month, BHS’s books are looking exceedingly ugly – not least because of its £571m deficit in its pension scheme.

There has been a lot of focus on the he-said, she-said of BHS’s finances and speculation about Green’s motivations. But relaxing its debts or finding a new injection of cash would only be granting BHS a stay of execution unless somebody manages to get hordes more customers coming through the doors.

Inside the store you will find few clues that this is a company about to go down the pan. There’s the odd hushed conversation between some staff, but others find the time to argue about the company’s returns policy.

There’s nothing wrong with BHS’s products per se. Its apparel is fine, if unexciting. Its homewares do the job. But that’s exactly the problem. It suffers from the same challenge that Britain’s major supermarkets have had to overcome: being too mid-market. Its clothes may be alright but they lack the attractive price tag customers will find down the road at Primark. And they lack the refinement even of Marks & Spencer, which is struggling with its own uninspiring clothes division.

Like M&S it has tried to offset wavering demand for clothes by going big on food. But its three bottles of prosecco for £18.99 and £3 meal deal were never going to set the world alight. And who’s going to spend £10 on its ‘Dine in for Two’ offer when M&S, now renowned for its food, is offering the same?

The successful bricks and mortar retailers of 2016 are booming because they make people feel something - whether that’s John Lewis’s sense of aspiration, Ikea’s Scandi coolness, or Aldi’s value-for-money. It seems that BHS leaves most people feeling ‘meh’. Its collapse is an awful prospect for its 11,000 staff but will leave few shoppers shedding any tears. 

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