Cold spring deals death on the high street
Shop chains Austin Reed and BHS entered administration this week, says Alex Williams. The high street comes under mounting pressure from online rivals.
Shop chains Austin Reed and BHS entered administration this week, as the UK high street comes under mounting pressure from online rivals. After the collapse of Woolworths, Jessops, HMV and Comet in recent years, some analysts argue that the double failure in a single week is a wake-up call for other bricks-and-mortar firms, from Poundland to M&S.
Footfall is steadily falling, according to retail monitor Ipsos, while figures from the Office for National Statistics show that online sales jumped 9% in March, and now account for 13% of all retail sales in the UK. "This has awful echoes of the demise of Woolworths," says Nick Hood, a risk advisor at an insolvency practice.
But extrapolating these two recent failures across the rest of the high street is probably a mistake, says Mary Dejevsky in The Guardian. Anyone who crossed the threshold of a BHS in recent years "could sense that death was probably close". Its branding was a mismatch and its flagship store on Oxford Street was best used as a shortcut to John Lewis.
By way of comparison, Debenhams (which has struggled in the past) reported positive sales figures in January, while M&S has managed to grow its sales every year for a decade.
The slightly dull reality is that BHS and Austin Reed were two tired brands that were losing money, and have now been killed off by a cold spring. "We need some warm weather and then we will know if there is a real problem on the high street," said Tim Denison, a retail analyst at Ipsos.