British Home Stores
|British Home Stores|
|Founded||Brixton, London, United Kingdom (1928)|
|Defunct||28 August 2016|
|Headquarters||Marylebone Road, London, United Kingdom|
Number of locations
|164 prior to administration (April 2016)|
|Products||Clothing, Homeware, Electronics, Furniture, Entertainment, Groceries, Beauty & Fragrance and Restaurant|
|Owner||Retail Acquisitions Ltd.
(In administration, controlled by Duff & Phelps and FRP Advisory)
Number of employees
|8,000 (2016) |
|Slogan||Modern Living. Made Easy.|
BHS Ltd is a British department store chain with branches mainly located in high streets or shopping centres, primarily selling clothing and household items. It was founded in 1928 by a group of U.S. entrepreneurs.
In recent years, the company began to expand into furniture, electronics, entertainment, convenience groceries and, most recently, fragrance and beauty products. The company had 164 stores throughout the United Kingdom at the time it entered administration, and 74 international stores across 18 separate territories.
On 12 March 2015, BHS was sold to the consortium Retail Acquisitions Ltd for a nominal price of £1. On 25 April 2016 it was confirmed that the chain had entered administration, following the failure to bring an estimated £60 million into the business, required to safeguard its future.
On 2 June 2016 it was announced that the company would be wound down following failed attempts to find a buyer. The website was closed on 25 July 2016 and it has been confirmed that all stores will be closed by 28 August 2016, after which the business will go into liquidation and end trading after more than 88 years.
British Home Stores was founded in 1928 by a group of U.S. entrepreneurs who wanted to follow the successful model set by Woolworths. They did not want go into direct competition with Woolworths, so set their highest price at a shilling. The first store opened in Brixton, but by 1929 the price limit had been lifted to five shillings to allow the business to offer more goods.
The business expanded by opening further branches, all offering small cafeterias and grocery departments, and in 1933 the business went public. After the war, the business continued to grow, and by the end of the 1960s had 94 stores nationwide.
The company expanded in the 1970s and 1980s, including the opening of stores in the newly-developing wave of indoor shopping malls (such as Broadway Shopping Centre and Lakeside Shopping Centre). A joint venture was launched with supermarket retailer Sainsbury's to create hypermarkets using the SavaCentre brand. Sainsbury's took full control of SavaCentre in 1989, and has more recently converted the stores to the Sainsbury's branding.
A downturn in business in the early 1980s was fought with a revamp of the stores and the selling of goods with higher profit margins. The company closed its only overseas store, in Dublin, Ireland, during this time (although there was a rapidly aborted re-entry in 1996 via a franchise store in Dublin's Jervis Centre). In 1985, the first overseas franchise store opened in Gibraltar. Such stores, not directly owned by the BHS company itself, have operated over Europe and the Middle East. In 1986, BHS merged with Habitat and Mothercare to form Storehouse plc. Soon afterwards, the British Home Stores registered company name and branding across its shops was replaced with "BhS" (later "Bhs", and since reverted to the all-caps "BHS", which the company used in addition to the full British Home Stores name prior to the full rebrand) and a new corporate logo. The exception was in stores that displayed a "historic" fascia, such as that in Edinburgh's Princes Street, which continued to feature the British Home Stores name in its original Roman type etched into the granite shop front. British Home Stores, like many other major retailers, has followed a trend of opening stores at out-of-town locations since the 1980s. One of these is the two-level store at Merry Hill Shopping Centre in the West Midlands (which formed part of an Enterprise Zone). This store opened on 14 November 1989, ultimately replacing the store in nearby Dudley, which closed in June 1990 after a directly related sharp fall in turnover. The nearby West Bromwich store also closed around the same time, its fortunes also affected by the Merry Hill development and smaller developments around nearby Oldbury, which had begun with the SavaCentre hypermarket in 1980.
Takeover by Philip Green
In the mid-1990s, the brand saw a further reinvention under guidance from retail design house '20:20'. The new look was showcased with the launch of the "millennium concept" shopfit, initially at the Grafton Centre, Cambridge (now simply called the Grafton) during 1995. With its softer Bhs "signature" logo and warm interior lighting, the concept attempted with varying degrees of success to meet the needs of the modern, more sophisticated (female) shopper. During the late 1990s, the stores which formed Storehouse Plc fell on hard times; BHS and Mothercare were the worst affected. Following a number of years of tough trading, Philip Green bought BHS from Storehouse Plc in May 2000 for £200 million. He then changed the company from public (Plc) to private (Ltd). In 2002, Green then went on to acquire the Arcadia Group of high street retailers, which includes Topshop, Burton, Evans, Dorothy Perkins and Wallis among others, to form Britain's second largest clothes retailer, after Marks and Spencer. Alan Smith, chairman of Storehouse at the time of the Bhs sale, commented, "He [Philip Green] had a crystal-clear vision and strategy. He had the guts to do the deal, to make it work when nobody else thought he could."
Return to British Home Stores
In May 2005, Green, owner of BHS, purchased Etam UK from its French owner, Etam Development. The Etam UK brands included Etam, Amelie May, and Tammy. The girls' fashion retailer Tammy was the strongest brand in terms of sales and consumer recognition. For this reason, and to help improve girls' perception of BHS as a whole, from early September 2005 stand-alone stores were closed and the brand integrated into BHS stores.
In 2005, BHS resurrected its British Home Stores fascia more than 20 years after it had disappeared from the UK high street. The move followed the purchase of several former Allders at Home sites from the defunct department store chain. These projects were designed purely to build upon the success of the homewares and lighting that BHS stores currently offered and to tap into new areas of business such as furniture, curtains, rugs, and wall art. Brands sold included Denby, Maxwell Williams, Typhoon, Brabantia, Terence Conran and Jasper Conran.
Green's wife, a Monaco resident received a £1.2 billion dividend. In early 2006, Green considered a sale of the business, contacting rivals including Asda and Debenhams. A joint venture was also considered as an option alongside an outright sale, but did not progress due to the tough condition of the market at the time.
On 30 May 2007, there were rumours of talks with Icelandic retail investor Baugur Group regarding a sale of the chain and that Green was hoping to raise around £450 million from selling the chain which would then be used towards the continuation of Arcadia's Topshop international roll-out. Analysts said Green was in a dilemma over whether he should sell the chain to rivals of his other Arcadia chains.
On 27 February 2009, it was announced that the company would be integrated into the Arcadia Group. Central support functions were merged and selected BHS stores housed selected Arcadia brands; for example, in July 2009, BHS stores in Solihull in the West Midlands and Bexleyheath in South London both opened Evans and Wallis concessions. In August 2009, the Canterbury branch opened Wallis and Evans concessions within the store. Other stores with Arcadia insertions include Tunbridge Wells, Oxford, Peterborough, Watford, Kilmarnock, Nottingham, Camberley, Norwich and Aberdeen.
Mike Goring was appointed managing director to the chain in May 2009, and in July, Jacquie Gray was appointed Creative Director. In 2010, BHS changed its logo, resurrecting the uppercase form of the abbreviation that had not been used since the Storehouse rebrand and the later rebrand in the 1990s. A new e-commerce website was launched, and a new store design that has gradually been introduced across the estate.
Mike Goring left BHS in 2012 to take up the position of Retail Director for Debenhams. After he left, former Marks and Spencer Menswear Trading Director, Richard Price was appointed managing director. Jacquie Gray left in 2014.
In January 2015, Green confirmed that he was considering selling the company following sustained losses, and that he had received a number of approaches.
Sale and restructuring
On 12 March 2015, it was announced that BHS had been sold to Retail Acquisitions for a nominal price of £1. It was also confirmed that Richard Price had left his post as managing director for a position with the clothing arm of Tesco; former BHS Chief Operating Officer Darren Topp was confirmed as the interim Chief Executive. Shortly after the takeover, a total of 51 out of the company's 171 stores were reported as being under threat of closure.
In September 2015, BHS owners Retail Acquisitions announced another rebrand, as part of a £60m rejuvenation plan, which resulted in the full British Home Stores name being resurrected on the high street for the first time since 1986. A programme of modernising stores with the new branding was announced, while plans to roll out food halls were to continue.
By early 2016, periodic store closures had seen the company withdraw entirely from several city centres, including Bath, Cardiff, Carlisle, Oxford, Reading and Southampton. Plans were also being made to reduce the size of the flagship Oxford Street branch by leasing excess space to other retailers.
In March 2016, the company sought a company voluntary arrangement (CVA) to allow it to restructure the business. As part of its application, it revealed a deficit in its pension scheme of £207 million, and sought to transfer its schemes to the Pension Protection Fund.
On 24 April 2016, Dominic Chappell (owner of Retail Acquisitions), announced that administrators would be appointed the next day. It was announced that the chain had entered administration on 25 April 2016, putting 11,000 jobs at risk. Duff & Phelps have been appointed administrators and are seeking to sell the business as an ongoing concern. It at this point has debts of £1.3 billion including £571 million in pension liabilities meaning either individual assets (such as stores) would have to be sold or the chain in most of its current form would be in new ownership. UK sports chain Sports Direct has been reported to be in talks to buy a number of existing BHS stores. However the talks to buy the company have since failed resulting in the subsequent closure of BHS stores. Head office staff were made redundant straight away from the announcement of liquidation, with stores expected to last up to 8 weeks selling the remaining stock. On July 23, 2016 the administrators Duff and Phelps shut down 20 stores, and the next week another 30.  It was announced that the remaining stores will be shut down by August 20 2016, however this was postponed to one week later whilst some of the remaining stores tried to sell more stock, bringing the closure of BHS's final outlets on 28 August 2016.  The BHS website, www.bhs.co.uk, closed on July 25, 2016.
The website, and BHS overseas stores, have been sold to Qatar's Al Mana Group. A message on the website stated that a new website is being constructed.
Within its stores, BHS primarily sells clothing and household items. In recent years, the company has begun to expand into furniture, electronics, entertainment, convenience groceries and, most recently, fragrance and beauty products. In August 2014, BHS opened two Perfume Shops as part of a new trial into beauty and fragrance products in its Watford and Meadowhall stores.
With the takeover of a number of Allders stores in 2006, BHS began to open stores using the company's original name of British Home Stores. These stores sold a full range of BHS homeware products, accompanied by a new furniture business. A branch in Chichester was the first of the former Allders sites to be refurbished, and by 2006 the success of the Home Stores rollout was extended to the larger high street stores, such as those in Bromley, the Metro Centre, Watford and the Merry Hill Centre in the West Midlands. By October 2008, the success of the Home Stores format had rolled out to 16 dedicated Home Stores and by 2010, the company had launched its independent furniture website bhsfurniture.co.uk.
The stores and website now sell a number of leading brands including Italsofa, G-Plan, Relyon and Silentnight. Larger homes stores, such as the one at Barton Square branch in the Trafford Centre, Greater Manchester also sell the Welle cabinet range and have Sharps showrooms.
In its stores, BHS sells a mixture of basic electricals based primarily on kitchen products (such as kettles and toasters). Recently this range has begun to increase, particularly in the designated Home stores and larger high street branches. Ranges beginning to be introduced include Breville, Russell Hobbs, De'Longhi and Vax. In addition, BHS has begun to sell larger electrical through a separate website, bhsdirect.co.uk. The service is run through a third party company Buy it Direct and is not directly controlled by BHS. This has allowed the company to expand its product range to laptops, tablets, large kitchen appliances such as fridge-freezers, TVs and air-conditioners.
In January 2014, it was announced that the chain would sell branded food products, the service to be trialed in 50 stores with the intention of making this a permanent addition in up to 150 stores. The first of three trial stores opened in Staines in March 2014, this was shortly followed by another in Warrington and a third in Romford. In 2015 BHS opened 20 such food store shops around the country including at stores in Swansea, Watford, Middlesbrough, Telford, Harrow, and Liverpool.
The BHS brand has been franchised since 1985 to stores around the world and, although they are not directly owned, products and support are supplied by BHS. The Tammy brand is available as a separate franchise. In early 2006 a new franchise, "Bhs Kids", was launched in the Middle East, carrying many best-selling children's lines from BHS stores.
BHS was the first high street retailer in 1995 to open a branch in Moscow. The £3 million venture was the largest in the international portfolio and was quickly followed by the opening of a second store in St Petersburg. Further stores opened in Uzbekistan and Kazakhstan in 1998. The Middle East remained the key focus, with stores in Saudi Arabia, Kuwait and Dubai, Oman, Qatar, Bahrain and Abu Dhabi. By 2000 the chain also had stores in Greece, Tenerife, Gibraltar, Malta and the Far East. In 2011, a store in Armenia opened. A franchised concession opened in the Falkland Islands on 1 February 2013. On 28 October 2013 a store was opened in Ulaanbaatar, Mongolia.
The overseas franchises and BHS.co.uk was sold during the administration period, and will continue to trade.
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