Industry observers have described the demise of BHS as a “significant blow” for British bricks and mortar retail, as the business announced it is to close all 163 stores after administrators failed to find a buyer.
“For those looking for a silver lining, respite will be scant,” said Jon Copestake, chief retail and consumer goods analyst at Economist Intelligence Unit.
“BHS and Austin Reed had a combined high street presence of over 280 stores, with closures likely to make a tangible impression on some high streets. As with all fire sales, the best assets will no doubt be picked up cheaply and resurrected by more successful retailers, which will make some dent in the job losses, but many will not as the British high street continues to undergo a painful correction to accommodate changing shopper habits.”
One BHS supplier said: “It’s very sad to see another retailer lose his way overtime. The biggest losers now will be the thousands of staff and members of the pension scheme. Philip Green milked the retailer for years even though he knew even the best, like him, could not turn it around. He should be dipping into his deep pockets to compensate staff.”
Independent retail analyst Nick Bubb said: “It’s not surprising in the sense that the Portuguese consortium supposedly looking at BHS was barely any more credible than the clowns at Retail Acquisitions. What is surprising is that there seemed to be such interest in BHS a couple of weeks ago, with the administrators trumpeting about four or five serious contenders, but it’s obvious now that they were just scavengers trying to get it on the cheap.”
He added: ”Nobody emerges from the BHS administration process over the last five weeks with any credit, least of all the hapless administrators, who raised false hopes about a rescue deal.”
“Hoping for the best, but fearing the worst – this sums out how most of the retail industry has been thinking during the administration process of BHS,” said Stephen Springham, head of retail research at Knight Frank.
He added: “Most affected landlords have started to build some degree of contingency, but some stores will inevitably be easier to re-let to other occupiers than others. A whole host of retailers will have already run the slide rule over the estate and will cherry pick those that suit their needs. For some, there may be healthy interest from a number of parties, others may need to realign rental value to become attractive.”
Jamie Merrick, head of industry insights, at Demandware said: “BHS had a fundamental lack of brand identity and that was its ultimate downfall. Brands need to carefully position themselves in the market so that shoppers know exactly what to expect when they walk into a store, or browse online.”
Chris Field, independent retail analyst and chairman of Retail Connections said: “There are too many players with too much stock chasing too few customers. The answer for all retailers is to get out more and see what is happening all around them; and the best place to start? Talk to customers and also to the people who understand customers – brand owners, consumer psychologists and the better research companies. Customers are dictating the future of retail and retailers who embrace that early will be the winners.”
Edward Cooke, acting chief executive, British Council of Shopping Centres (BCSC), also suggested that some stores may be converted to leisure or residential units if a retail occupier cannot be found.
He said: “At the same time there is a lot of optimism from property companies given the asset management opportunities presented by BHS stores which are typically larger than average. Landlords see the potential in these larger format stores which can be easily divided to be made more attractive to occupiers as well as boosting potential rental income.”