Much like the weather, Brexit has become a somewhat convenient excuse for struggling retailers to explain away weak sales. But in the case of Bonmarché, it was the final nail in the coffin.
After years of turbulence, during which its sales and profit growth faltered, and it was forced into heavy discounting, the 50-plus womenswear retailer finally succumbed and called in administrators last Friday. It blamed the drawn-out Brexit process for compounding a pre-existing slowdown in consumer spending.
Of course, the problems at Bonmarché go beyond a Brexit-related slump in sales. When former CEO Beth Butterwick took the reins at the end of 2011, the retailer was just eight weeks away from a pre-pack administration.
Butterwick closed some of its stores and made efforts to update the product, returning it to steady growth. But the cracks began to show again in December 2015, when it lowered its full-year profit expectations after a period of volatile trading.
Helen Connolly, who replaced Butterwick as CEO in August 2016, has done what she can to cut costs, make further improvements to the product and grow its online business. However, last year’s Black Friday was a huge disappointment for Bonmarché and, despite “extensive” discounting, its sales failed to recover over Christmas.
The efforts to modernise its product were not enough to attract shoppers, who could take advantage of a better experience – both online and offline – at some of its competitors.
Connolly explained last week that neither a company voluntary arrangement nor a refinancing would have addressed the challenges facing Bonmarché. Its model is simply outdated, and it could not change quickly enough to mitigate the Brexit effect.
Now that prime minister Boris Johnson’s timetable for “getting Brexit done” by 31 October has been rejected by parliament, the European Union has approved another extension, to a date that is yet to be confirmed. Industry leaders told us this week that the worst outcome would be a further delay, but that is what has occurred.
Whatever happens, struggling retailers will have to make bolder and faster decisions than Bonmarché if they are to weather the ongoing storm.