BHS is the second-largest company insolvency to hit the retail sector since the onset of the recession, according to the latest Who’s Gone Bust? report from the Centre for Retail Research.
In the whole of 2015 there were 25 significant company insolvencies in the retail sector, affecting 728 stores and 6,845 employees.
By April 2016, there were already 14 company failures, affecting 989 stores and 20,245 employees.
BHS is the 26th major retail failure since 2008, which began with Blacks Leisure entering into company insolvency, and is the second-largest of all after Woolworths.
It went into administration on April 25th, although swift work by its creditors offered some salvation, as 95% voted for BHS to go into a company voluntary arrangement.
With 164 stores and a massive 11,000 staff, there are clear benefits to allowing BHS to continue trading if possible – but the prospects are not good.
The Who’s Gone Bust? report states: “The prospects are bleak, although it reported last month that half of its outlets traded profitably.
“Like all retailers it has been hit by adverse trading conditions, but has not been given the imaginative overhaul required to keep its place in the high street, and its assets have instead been used to produce cash for its owners for many years.”
BHS is not the only familiar name to face company insolvency in April, as the beleaguered tailor Austin Reed called in the administrators, having last year entered into a CVA.
Department store McEwans of Perth went into administration in late March, following a period of poor sales, a symbol of the pressures faced by independent retailers too – even those that have been established in their local market since 1868.
And proving that ecommerce is not immune to the problem of poor sales, online toy traders Trod are limping on while the administrators try to find a buyer for their several online brands, after an investigation under allegations of price-fixing for the US market.