BHS’ new owners, Retail Acquisitions, emerged from nowhere – will they be able to restore the struggling retailer to its former glory?
The mystery that surrounds the new owners of BHS is clouding the ability to make a judgement on the future prospects of this stalwart of the high street.
Retail tycoon Sir Philip Green sealed a deal to sell the business last week for £1 to a group of previously unknown investors with little experience of running a retail company.
The buyers, Retail Acquisitions, emerged from nowhere, surprising those who thought a sale to the likes of Hilco or Apollo more likely.
The firm is led by chairman Kevin Smith, a former City financier, and a retired racing driver, Dominic Chappell. Other details about the new proprietors are sketchy, adding to the scepticism the ailing retailer can be returned to former glories.
The task facing the new owners looks daunting. As well as operating at a £70m full-year pre-tax loss when it last reported, the company has a £100m-plus pension deficit.
And Sir Philip’s decision to offload BHS after 15 years of ownership hardly bodes well for the prospects of the brand either – after all, few businessmen are known to relish a backs-to-the-wall challenge like the billionaire owner of Arcadia.
It has all led many to speculate that this is a step towards the eventual closure of the business.
But Sir Philip’s innate refusal to admit defeat still runs through the rhetoric of the deal – despite admitting he is “out” of BHS – and that provides hope that the retailer has a future, or at least a crack at a future, under the new bosses.
Sir Philip has been adamant that he sold BHS to the new owners because of their commitment to its future and assurances that if assets are sold, the money will be reinvested into BHS.
Smith has begun to articulate a vision and a plan to turn BHS around too – a plan that will be at least two years in coming to fruition – which includes reconfiguring the store estate, an expansion of its concessions business and a focus on ecommerce and international.
“Watch this space,” Smith said this week when challenged about whether he could do what the retail veteran Sir Philip could not.
Given the mystery, the jobs and the brand at stake, and the interest in anything Sir Philip touches, the industry will be doing just that with great interest.
- Chris Brook-Carter, Editor-in-chief