Sir Philip Green’s decision to merge Bhs into Arcadia didn’t grab many headlines this week. Strange really, because while no money might have changed hands this could turn out to be one of the most significant retail tie-ups of the year.
On a simple level, running one head office, one logistics operation and one IT team rather than two is the sort of basic cost management that is crucial in a recession.
The only question is why such an astute player as Green hadn’t done it sooner.
But while Green refused to be drawn this week, there is potential for a bigger game plan that could change the face of the high street. While other brands in his stable such as Topshop have blossomed, Bhs has frequently been a headache, and it has struggled to carve out a clear identity for itself.
What it does have, though, is an amazing portfolio of large-footprint stores in town centre locations – town centres where Green might have five or six smaller stores for each of his Arcadia brands.
With Green being one of retail’s most vociferous critics of property costs, it doesn’t take Einstein to see that this could represent an opportunity to save money and at the same time transform the often tired-looking Bhs stores to create a new and exciting retail concept. There have been many false dawns in the recent history of Bhs, but this could be the right idea.
In for a pound
Retail Week is always keen to find the good news stories in retail, and there aren’t many brighter spots in the UK at present than Northern Ireland, where sterling’s weakness is drawing shoppers across the border in droves.
The pound’s problems don’t have many plus points for UK retailers, so this is one that is welcome, but tempered by the fact that for those retailers that trade south of the border, trading conditions are if anything even worse than in the UK. While the UK’s December VAT cut was madness, given the state of the Irish economy its VAT increase on the same day was bordering on suicidal.
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