Home > Uncategorized > BHS A way back or not?

BHS A way back or not?

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Is there any way back for the BHS chain?  There is an interesting question to address here and rides on the back of an online conversation I had on a related matter yesterday.

The most eye catching element of this story is that the majority of BHS’s landlords have agreed to rent reductions of up to 75%. This is quite a concession and clearly a selection of the present commercial property market. Mt memory may be faulty but I am sure that when Woolworths and MFI collapsed a few years back the idea of rent reductions was out of the question. Times have possibly changed.

BHS is not a striking brand and its difficult to see where they fit into a crowded market. It is hard to identify exactly what is their strength although that may well be more of a reflection of my ignorance. I was also surprised to see that they still have over 150 stores.

Many credit managers and lenders around the country will be wondering what the next step will be. I understand that most suppliers are demanding payment upfront and surely Credit insurance is now impossible to obtain. This precipitates the vicious circle that has brought down many a retailer whereby the lack of available cash drains the very resources that the business needs to survive. Its Woolworths all over again

But aside from the currents status, what view should  a lender have taken on BHS before the current CVA. This brings me back to my conversation.

I was told that financial services are being “deskilled” and that decisions will be made on data by computers that “can be located anywhere”. This was effectively a claim that bankers were soon too be made redundant

So tell me which computer is going to be able to look at the “dated and dowdy” BHS brand and take the decision that this is a business fading fast? Which computer is going to be able to take a view of the future of high street retailing in relation to specific brands? How is a computer going to make a human judgement on the very people running BHS?

All these are very significant factors. Lending simply on past balance sheets is risible. lending is about future prospects not solely about analysing the past

And does BHS have a future?

 

 

 

 

 

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