BHS to target younger customers as it makes a comeback in the UK
You may have thought BHS had shut up shop for good but now a Qatari group wants to rebuild its fortunes in the UK by targeting younger customers.
The British brand – but not its shops – was acquired by The Al Mana Group back in June, along with BHS.com and BHS' international business. Since then the Qatari group has been busy, setting up a customer services centre in Glasgow and opening a new logistics hub in Dubai, ready for relaunching BHS as a website on Thursday.
By the time BHS shut-up shop at the end of August, the brand's reputation was in tatters. Not only had public opinion turned against its former owner, retail tycoon Philip Green, for walking away from his responsibility for the BHS pension scheme, but BHS stores were widely considered dull and slightly depressing.
The new offering from BHS will be very different, according to managing director David Anderson, who has been working at the retailer since 2009. The business will be targeting the over-35s with its clothing ranges, rather than older consumers, because BHS' online customer has always been younger.
The Al Mana Group wants to reposition BHS as a middle-market retailer, competing with the likes of John Lewis rather than Bonmarche. The Qatari holding company has been running BHS' outlets in the Middle East since 2000 and has created "very good-looking stores", according to Anderson. The group aims to bring that same quality of service to the UK.
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"In the Gulf going shopping is the number one past time and you have to be first rate at it," Anderson said. "And the Al Mana Group are exceptionally good at it."
"BHS is seen very much as mid-market overseas. In the UK it was seen as slightly less than that."
Blanket promotions are no more as BHS refashions itself as a more sophisticated retailer.
Former M&S executive Anderson told CityAM: "The site will be much cleaner, less cluttered and it won't do blanket promotions, ie 50 per cent off everything.
"There will be targeted promotions, but we are very proud of our prices. There is some exceptional value online, so I'm not going to alienate our original customer."
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"We've opened the customer service centre and call centre in Glasgow because it's in the UK, because it was important to us that we create jobs in the UK," Anderson added. "We want to build this business on solid ground. Nearly everyone employed in the re-launch has worked with us before."
Most of BHS' former suppliers will now be involved in the BHS.com operation, and the employees in the new London office also worked for the retailer before it went into administration earlier this year.
Retail analyst Richard Hyman said suppliers staying on was "a significant vote of confidence in the new business".
"After the generally very bad treatment of staff from old BHS, it’s great to see new owners backing their belief in the brand by investing in a new incarnation of the business," Hyman said.
"But will it work? With knowledge from the inside track since 2000, Al Mana must know the brand inside out. The plan to focus solely on online for the UK is sensible and allows them to manage costs more tightly.
"My understanding is that the international business already performed reasonably well so there is a solid base to work from."
BHS has ditched the struggling parts of the business and has been able "to choose the cards it holds going forward", Hyman says, which is a significant advantage.
And, although physical stores were not BHS' strong suit, Anderson wouldn't rule out opening physical shops again in the future, reinstating BHS on the high street.
"It's not on the agenda yet," he said. "We need to make a success of BHS.com, and then, who knows?"