More Lessons from British Home Stores

The defunct chain of shops that was British Home Stores has had more publicity in the past year than it enjoyed in any decade when it was an active business. This has largely been due to the pathetic way in which the life of the business ended, and the way its deferred pensioners were treated by the last two majority owners of the firm. The penultimate owner, Sir Philip Green, has in my view unfairly been lambasted: he has made a donation to the pensions fund that has been acceptable to the Trustees [who cannot be excused of negligence] and to the Pensions Regulator. The circumstances of his sale of the declining business to a twice-bankrupt chancer are murky, but there has been no indication of criminality. The final owner might well have been out of his depth, but he pushed his luck and took what he could out of the struggling business in a way that can at best be characterised as cynical.

For many years I had wondered how the business survived: and the one commonly recurrent answer was that it was the best place for lampshades and other lighting, especially for the home. I used the BHS shops for that purpose because they really were at least as good as anywhere else in the range, variety and taste of the wares in their lighting department. I became surprised at the longevity of that lead in one aspect of the business, over a couple of decades when all other departments seemed to get more run-down and the selection of goods was less attractive than in other stores. I was also surprised when Philip Green took the chain over, because his other shops were focused on particular market segments, which they addressed [in the main] successfully; and I was unsurprised when he dumped the cuckoo from his nest.

It is now a year on from the collapse of the business, and research publicised today makes interesting reading. More than 90 of the 160 BHS shops that closed last year remain empty; but almost all the London shops have been re-let and are in operation [mostly as shops] under new management. But around the rest of the country almost all of the shops are empty: this applies to most of the high street sites, and also to a few that are located in modern shopping centres in relatively prosperous towns. Large stores are less and less needed, as more shopping is done on-line via large warehouses and delivery services; which include the revival of Royal Mail for whom the internet has provided compensation for the decline of letter mail, which is itself largely to product of the internet.

Behind these obvious changes in shopping habits lies the more important fact that all Tory and many Labour politicians fail sufficiently to emphasise: the absolute real-terms decline of the economy in most regions since the Thatcherite destruction of so much of the material capital on which true prosperity ultimately depends. Human beings are material structures: we need the clothes and furnishings that British Home Stores used to offer us, almost as much as we need food and housing. Much of what we eat [and an increasing proportion of what we wear] is imported: so we need to sell countervailing exports to the rest of the world. But we no longer export goods in sufficient volume or with sufficient quality, novelty or other positive characteristics that used to make British goods attractive in global markets.

 Britain - hailed as the 'workshop of the world' before 1800 - became a net importer of manufactured commodities early in the Thatcher years: but the residue of old industries and the rise of new sectors, especially in the so-called 'knowledge' and 'technology' sectors as well as pharmacology and financial innovations, meant that until the financial crisis [that became apparent in 2007 and reached its peak in 2009] the balance of payments could from time to time be maintained. Since the 'crunch' a deficit on the UK's balance of payments has become entrenched: even after foreign money has been paid prolifically to UK sellers of London house properties, small estates in the home counties and firms that have made successful innovations. While super-luxury shops proliferate in central London, largely addressing wealthy aliens and the very small top-earning segment of British society, the majority of the country becomes increasingly dependent on pound-shops and charity shops and the most competitive supermarkets. A walk along any high street, especially one that lies more than commuter distance from London, is a salutary experience. It is proof of the material decline of the British economy; which no amount of financial manipulation can conceal.

British Home Stores, both historically in its decline and fall and now through its legacy of unlettable premises, stands as a stark symbol of the disaster that Mrs May and her cabinet have not yet noticed.