Business

BHS: the 88 year old brand with 'zero' chance of survival

cafe at BHS lots of empty chairs
Image caption There are lots of empty seats mid-morning in the Oxford Street BHS cafe

"I'm of the older generation. We're much more familiar with BHS. With youngsters it's not the same," says a well-groomed customer who gives her name as Ann.

She's nursing a large coffee. It's mid-morning - elevenses time - in the Oxford Street flagship BHS store, but the cafe which opens un-enticingly onto a slightly dingy side street is very sparsely populated.

Apart from 72-year-old Ann, there is a group of three women discussing the attractions of Waitrose and a gentleman with a bag of socks.

Today Ann's not buying anything, just killing time.

Last year she bought a nightdress at BHS that had been reduced from £18 to £9 but she hasn't bought much since then. She says even at her age she can see that BHS has "fallen behind".

Image caption The BHS menu hasn't whetted enough appetites

BHS, or British Home Stores, as once was, holds a rather specific niche in Britons' bargain-hunting, nest-lining hearts. Most of us at some point or another have purchased a set of bedsheets here, or taken advantage of the three-for-two, polyester-rich school uniform offer.

But not enough of us are spending our money there to ensure the 88 year old brand has a future on the British High Street.

The problem is amply illustrated with a pack of two pale blue school shirts that retails at BHS for £8. A similar pack is available at Asda online for £3.50. And apart from the supermarkets encroaching on BHS territory, there's stiff competition from the likes of Marks and Spencer when it comes to quality, Zara and H&M when it comes to fashion and New Look and Primark on price.

Image caption BHS didn't lure in quite enough of the next generation

The gentleman at the next table has bought seven pairs of socks for £10 "with antibacterial technology". He's very pleased with today's bargain but it turns out that he has already struck a deal - a much larger one - with BHS.

He tells me he's from Lancer Property Asset Management, the company which now owns the freehold on this, BHS' flagship store, and has arranged its lease to Abu Dhabi's ruling family. The sale was supposed to help shore up the company's finances. But it wasn't enough to safeguard the chain which has filed for administration.

By this time next year he says a third of this shop will be occupied by a Polish fashion retailer, well known in eastern Europe, but not yet here. The rest is still up for grabs, but he envisages some kind of retail on the lower floor and perhaps a "fitness" related offering upstairs.

But as for BHS itself surviving as a brand, the chance of that he puts at "zero".

So what did they do wrong?

"I don't think anyone has a clear answer. It is just one of those slowly degrading, much loved brands of a certain type that was not rescued by a visionary," he says. "It's sad."

Image caption Not quite fashionable enough, not quite cheap enough
Image caption You can buy a mid-quality bridesmaid's dress for £40

Even as the summer season kicks off many BHS wares are being marked down. Everywhere signs offer 25% or 50% off.

The BHS fashion buyers have put great faith in pastel and denim three-quarter-length cotton trousers and an alternative palette of rust and navy.

Three women who are happy to chat but don't want to give their names are examining bridesmaids' dresses. They've seen some in Monsoon for twice the price but these look like good enough quality. They're regular BHS customers and say they are really going to miss BHS if it does disappear.

"I do feel sad," says one.

"I'm always popping in. It's really good for homeware," says another. They're all worried that if their local BHS in Wood Green closes there'll be nowhere near home to buy underwear.

"Unless its a thong from Primark," laughs her friend. "For 50p".

Image caption Lucy Troop is splashing out on £4 picture frame but that won't keep BHS' finances afloat

But it's lighting where BHS has always, by general consensus, led the pack.

Unfortunately Lucy Troop, 54, who has popped in today to find a lampshade still can't find one she likes, despite all the offers.

"I think there are still some quite good value things, some nice things along with the tat," she says. But all she's found today is a £4 picture frame. BHS won't carry on trading on the back of that kind of purchase.

"I'm going to John Lewis," she says.

And this could be the nub of the problem. BHS isn't cheap enough to keep pace with the supermarkets, but when its customers have a bit more money in their pockets they move on to more upmarket brands.

"It's a shame," says Lucy. "They didn't keep up with the times."

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