I wrote recently of the demise of department store retailer BHS as a high street presence in the UK. It is a moot point whether some of the pains that ultimately led to the demise of the business were self-inflicted. But what cannot be doubted is that the disappearance of BHS from high streets and shopping centres is a very salutary example of the huge structural shifts which are reshaping the retail industry today, and not just in the UK. BHS’s collapse also showed in stark terms how impossibly difficult life can become for retailers unable or unwilling to make fundamental changes in order to retain or re-establish their relevance to shoppers, especially the growing number of digitally enabled shoppers with previously unimaginable levels of access to brands, products, and price information.
And yet, just a couple of months later BHS is back! Well, sort of. Out of the wreckage of the old general merchandise store-based business, a very different type of BHS is trying to re-emerge – as an online only retailer. Instead of being an all-purpose general merchandise retailer, BHS.com will have a much edited merchandise assortment limited initially to just homewares and lighting – two categories where the old business had a particular strength with many shoppers. Other categories may be added later. BHS.com says it will be targeting a somewhat younger customer than the old business – logical given its online only orientation. And rather than 11,000 employees across its store network, BHS.com starts life with just 84. The new incarnation of BHS also has new owners – the highly diversified Almana Group in Qatar, pointing to the mobility of capital and ownership in the growing globalisation of the retail industry.
Will BHS.com be a success? Of course, it really is much too early to say. But what is clear is that the new incarnation of BHS exhibits many of the features needed in the new landscape of retailing that the business in its previous incarnation so sadly and, ultimately, so disastrously lacked. It is digitally driven; it is more sharply focused on a specific customer type rather than trying to be all things to all shoppers (and, ultimately, not enough to anyone), and its product offer is heavily edited down to just a focused suite of specialty categories where the business has historic strengths. It also has the considerable benefit of being a well-known, if not always well-shopped, brand which a typical start up retailer doesn’t have. So certainly there are reasons to be at least cautiously optimistic. One further reason for optimism is that there may be an analogy with the great success that Shop Direct has had in taking a suite of redundant general merchandise retail brands and turning them into an effective, relevant, admired, and profitable set of online only retail businesses. In the Shop Direct portfolio a brand such as Littlewoods has been completely reinvented. Like BHS, Littlewoods had a strong presence of general merchandise stores on high streets and shopping centres across the UK. Today, those have all gone and a very tired ‘old retail’ business has been entirely reinvented as an internet only ‘new retail’ brand that is relevant again to the shoppers it is targeting.
The attempted rebirth of BHS as an internet only retailer does, however, illustrate too some of the big issues that happen when structural change is taking place to a sector on this scale. It seems inconceivable that BHS will ever again employ anything like the 11,000 employees it had when ‘old’ BHS stopped trading. In addition, while some of the old businesses 164 stores have been re-let or sold to other retailers, the majority have not and very likely never will be. Many urban centres are faced with the very considerable challenge of revitalising town centres against a backdrop of far less of the space in those centres being occupied by retailers as it once was.
Successful or not, the demise and rapid re-birth of BHS in a very different form is hugely and very poignantly emblematic of the very different retail landscape that this business is now trying to reinvent itself in.
Featured image credit: British Home Stores Closing Down Sale Wood Green by Philafrenzy. CC-BY-SA-4.0 via Wikimedia Commons.