At the Retail Week Live conference a few weeks ago, I listened to Darren Topp, chief executive of BHS, and Ted Baker’s Ray Kelvin.
The comparison between the two businesses could not be more stark. Ray Kelvin was on rampant form (never sit in the front rows when he is on stage) while Darren Topp was valiantly defending his business.
As we all know, retail in the UK is both competitive and brutal. We have so many shops selling stuff (too many) and the consumer has so much choice, that any retailer with an unclear proposition will ultimately fail. If the customer doesn’t get a good feeling within the first few minutes of entering the store or website, she or he goes elsewhere and doesn’t return.
I first remember the Ted Baker brand from nearly 20 years ago when we introduced them into Selfridges. Even way back then, the personality and charisma of the founder was present in everything they did from the product to the head office environment.
In 2002 I went with my then 16-year-old son to buy his first suit for sixth form. We initially went around the Ted Baker concession in Selfridges in Oxford Street and then into M&S, where a charming lady dressed in a staff uniform attempted to sell him a machine-washable suit. On the basis of ‘coolness’ there really was no contest.
There can be no doubt that Ray Kelvin’s passion pervades throughout the business, enthusing and motivating his team to do well and, as a result, as the headhunters will tell you, very few people leave the organisation. From the retail offer and a consistent pattern of financial results, Ted Baker has rightly become a major British success story.
Contrast this then with the situation for BHS and Darren Topp, where the BHS retail proposition is not clear and the brand has been rather unloved for many years. The consumer has moved on and, except in the case of department stores, the relevance for a large national chain of large space fashion/general merchandise stores, targeting a very wide age profile with multiple product categories, is questionable. C&A ceased trading in the UK some years ago. M&S in general merchandise has the same challenge. Zara and Primark do it better but are more focused.
The successful CVA will help BHS, but only in the short term as there is not a positive track record of companies, who have gone through this form of restructuring, ultimately surviving in the long run. Although Darren Topp and his team have this massive challenge, you want him to succeed in trying to save the business, if only for the benefit of its 12,000 employees and more than 20,000 pension scheme members.
Besides the very significant issue of the pension fund deficit, what will finally count is establishing the consumer proposition.
- Peter Williams is chairman of Boohoo.com and Mr Spex