BHS to be liquidated - 11,000 jobs lost

You know the directors & owners of BHS must've done a REALLY bad job when OcUK are slating them & siding with the workers.
 
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daz said:
From what I understand, when the 2007/2008 recession hit, the pension fund took a massive hit because of its massive exposure to equities. This meant that decently provisioned fund now had a massive short fall. In the intervening years, because of the struggles of BHS as a business it's not made enough money to make up that shortfall.
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It didn't take a massive hit relative to the size of the current reported deficit of £571 million. It went from from a small surplus in 2008 to a deficit of around £140 million in 2009.

The pension trustees, not the business, are responsible for the investment strategy of the fund. That shift to deficit was pretty common across all defined benefit pensions schemes for that period, btw, but you're right - the trustees made a decision which, in hindsight, cost the existing fund losses.

The single largest contributor to the current pension fund deficit is the revaluation of many of the existing investments within it alongside the recalculation of the estimated future liabilities, both of which have been absolutely savaged by the UK's quantitative easing program.

There's little doubt in my mind that Green has absolutely maximised the amount of money taken out of BHS, but the performance of the pension fund and its current valuation is as much the responsibility of the pension trustees and the current owners as it is Green's, and all are victims of the side effects of the government's QE policy.

BHS isn't some special case, and hasn't arrived at this position due to it's pension fund deficit. It has arrived here because it is a failed business with a pension fund deficit. Many other leading companies have eye-watering pension fund deficits but have a more robust business model behind them.

Have a look at this: https://www.lcp.uk.com/media/1143585/lcp-accounting-for-pensions-2015.pdf

A few excerpts:

10 FTSE 100 companies have combined pension deficits of £40 billion. Billion!

FTSE 100 companies REDUCED their contributions to their defined benefit pension schemes by a combined £2.3 billion in 2014.

The easier to read Daily Mail version is here: http://www.thisismoney.co.uk/money/...und-time-bombs-BHS-investors-steer-clear.html
 
I'm 33 had always heard of bhs but never recall actually going into one. I happened by chance to go into one in Southampton when they had a sale it felt like a cheap rundown store that wasn't particularly cheap. It appeared lost in its own image. I'm not suprised it's gone bust hmv and game will go soon enough.
 
holymonk said:
I'm not suprised it's gone bust hmv and game will go soon enough.
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I'm not so certain about GAME. After their last fumble where they nearly folded they've made big strides in diversifying and changing their business model.

For instance, GAME are now running a model similar to Amazon, in that they are a marketplace for other vendors.
 
paradigm said:
I'm not so certain about GAME. After their last fumble where they nearly folded they've made big strides in diversifying and changing their business model.

For instance, GAME are now running a model similar to Amazon, in that they are a marketplace for other vendors.
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It's kind of interesting/sad how much push companies need to adapt and change to what's happening in the market. I'm surprised they managed to bounce back but ultimately shocked they never had that kind of foresight to begin with.

Sad to see BHS being liquidated and just how well the higher ups will benefit from it. On one hand I feel bad for the employees but know that I and many others have contributed to it by simply not doing any high street shopping anymore.

This morning I bought a load of bog rolls and T-shirts from amazon. The bog rolls are cheaper than any other supermarket. I have next to no incentive to go out shopping anymore.
 
Game was fundamentally profitable, just not under the mountain of debt it had built up over the years. Pre-pack administration and come out the other side paying pennies on the pound to your creditors and jobs a good 'un.
 
I do feel sorry for all the staff, not a nice time/place to be in for them.

Stretch said:
It was an awful store. It's felt old an tired for a decade. I can't think of a single purchase item which would make me want to enter BHS. Supermarkets and online have squeezed them into irrelevance.

M&S (non food), and Debenhams will be next.
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Mostly agree with this, BHS peddled the same tat year after year relying on the same customer base that eventually got old and died. Debs is heading the same direction I think, not sure I agree with M&S though - they've had some ups and downs over the last few years but I think they're still in a decent position as long as they're willing to invest and evolve a bit.
 
Scottland said:
Mostly agree with this, BHS peddled the same tat year after year relying on the same customer base that eventually got old and died. Debs is heading the same direction I think, not sure I agree with M&S though - they've had some ups and downs over the last few years but I think they're still in a decent position as long as they're willing to invest and evolve a bit.
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I don't understand how so many people become stuck in their ways. I guess it proves people hate change.
 
I think recent years have started to change that, but yeah people hate change (or rather the effort to change). Just look at how many people keep their bank or electric/gas supplier the same for years even though it can be much more expensive for them.
 
Scottland said:
I think recent years have started to change that, but yeah people hate change (or rather the effort to change). Just look at how many people keep their bank or electric/gas supplier the same for years even though it can be much more expensive for them.
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I do believe this behaviour is changing though.

People are wising up to the fact that companies these days offer little to nothing in terms of loyalty. Consumers are a funny bunch of people, they'll go into a shop to whine about how the TV they want to purchase is £5 cheaper online, but will happily pay the renewal price on their car insurance / mobile phone contract.

At the end of the day, you need to have the mindset of every man to himself. If companies aren't willing to play their part in adapting to changes in the market then they find themselves in difficult financial positions.
 
I don't buy anything of the high street anymore, I hate shopping, I order online and get it delivered either to work or home.
 
glen8 said:
come on then, who will be picking up those 11,000 jobs?
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that doesn't make sense... if a job ceases to exist then no one can be said to pick it up - the people who were doing those jobs can find other jobs, retire, collect benefits etc..
 
dowie said:
that doesn't make sense... if a job ceases to exist then no one can be said to pick it up - the people who were doing those jobs can find other jobs, retire, collect benefits etc..
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And they all had warnings. this news was announced earlier this year so they knew this was most likely going to happen.
 
I would bet on brands like Dotty P, Tammy, Burton and Top man etc will disappear next. They fell back into BHS and Outfit and closed a lot their own branches. Looks like they have just lost a massive amount of retail space.
 
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