It was no surprise when JD announced on Tuesday (November 25) that it was offloading loss-making fashion chain Bank, with many in the industry saying it should have happened “years ago”.
But does the sale spell the beginning of the end for Bank or will new owners Hilco be able to perform “a miracle” - in the words of one former supplier - and help this flagging fascia do a 180?
Judging on the track record of the Hilco group, which in the past has put companies including Faith, A-Wear and MK One into administration or receivership, there are three possible fates for Bank.
Hilco could immediately start to close down non-profitable stores and liquidate as much stock as possible to make it profitable before they sell it on – or they will liquidate stock, sell the stores, strip it out and put Bank into administration. The final option is to keep the company, make it profitable and trade it, as Hilco did with HMV last year.
However HMV was an iconic brand and retailer and, although the business was in trouble, there was a lot of love for the company. Consumers wanted it to stay on the high street because of the unique in-store experience consumers were able to enjoy.
Unfortunately the same cannot be said for Bank. It is more reliant on the host of external brands it stocks than its own reputation. These brands are also readily available across the high street. Furthermore, Bank stores are generally small and crowded; they do not encourage consumers to dwell for long. So as a relatively insignificant player in the fashion market, both commercially and historically, one can see why Hilco might be tempted to sell off the assets.
Bank would have to get the right team on board, tighten up its store portfolio and attract the right line up of brands to survive, but there may well be a stronger argument for selling off the business than reforming it.