BHS Goes Online

The troubled retail brand is under new ownership, which believes it can survive as a dot com company.

In June 2016, weeks after BHS went into administration after failing to secure a buyer to take on its £571m pension deficit, the Al Mana Group acquired BHS.com and the BHS brand. A new company, BHS International was formed to broker the acquisition.

The old BHS went into administration in April 2015 after failing to get customers into its high street stores. Now, after successfully securing a buyer for its online properties, the brand will re-open as an online retailer.

“A huge amount of work has gone into rebuilding and launching BHS back into the UK as an online retailer,” said David Anderson, Managing Director of BHS International in a statement to Leeds Hacks, “With a loyal British customer base of well over one million people and the fact that we have secured contracts with so many leading suppliers who are providing products that were among the most popular with our shoppers, we are in the best possible position for launch.”

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The former BHS retailer on the high street

So why are so many of these former high street retailers taking the decision to launch online? We took a look at the stores history on the high street and found out why this seems to be an ongoing trend.

Q: So what is BHS?

A: British Home Stores, commonly abbreviated to BHS and legally named BHS Ltd was a British department store chain with branches located in high streets and shopping centres, primarily selling clothing and household items. It was founded in 1928 by a group of U.S entrepreneurs.

Q: How many high street stores have failed since the recession?

A: Research from Retail Research has analysed the main retail failures in the period since the recession. There are 26, with 11,220 stores affected and 138,134 employees. They range from Blacks Leisure in 2008 to Brantano and BHS in 2016. Woolworths was the biggest casualty in 2015 with 820 stores and BHS the second largest. These figures are based on the CRR’s own research over this period. Former BHS Sir Philip Green boss sold the retailer for £1 little more than a year before the retailer went bust.

Data from Retail Research

Q: So why does Anderson think that the UK online business will survive online?

A: “What I’ve got to do is look forward. This is a new business. It’s an iconic British brand, steeped in history. We want to focus on that and move forward. Will we ever be international online or go back to bricks and mortar? Who knows? In retail you can’t rule anything out, it’s ever-changing.”

Q: How will BHS be different to the high street store?

A: “Although we are starting again in the UK, we have a number of advantages over a typical startup. We are nimble and efficient, but with a great brand, strong customer base and a proven and dedicated team,” Anderson said.

The new BHS employs 84 people, primarily based in London. It has also partnered with Ascenos, a well-known British call centre firm, whose dedicated team will be based in Glasgow. Most of the 84-strong workforce is made up of former BHS workers, and Anderson said he hoped to employ more people once the business was established. The new website has also been started from scratch said Anderson: “It’s going to be much cleaner and uncluttered.”

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A derelict Woolworth’s store which faced closure in 2015

 An experts view on why high street stores like BHS and Woolworths have moved online

“The retailers aim to achieve both financial and operational efficiency is the main reason they move online,” said Professor Prithwiraj Nath whose research at Leeds Beckett university is focused on the use of big data in digital marketing, with a focus on retail. He said: “retailers are increasingly moving online to reduce overheads, fixed assets and staff costs and trying to offer customers more choice.”

Q: Are retail trends moving off the high street and towards online?

A: “The trend in retail format will move more towards the hybrid model (brick and mortar and online/ mobile) and sometimes more towards only online model,” Nath said. The Professor also thinks that it’s much easier for companies to ” maintain emotional and functional engagements with consumers” using mobile technology.

Q: Will these online stores survive online?

A: Nath has his doubts and said that BHS have lost their uniqueness in the market for a pretty long time, and explained that there are many retailers that offer similar products at  much better value. “Losing their high street presence will be much more detrimental in their effort to build new relationship with customers.”

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The new look BHS website

The last 22 high street stores closed at the end of August, bringing the curtain down on the retailer’s 88-year history. One big question that remains is what will happen to the pensions built up by loyal BHS workers over the years?

By Lee Francis

About the Author

student
This article was produced by a student or students on the BA in Journalism at Leeds Beckett University.

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