Why did BHS fail? Another victim of disruptive innovation?

Thoughts from Creative Orchestra’s The Garage (thought leaders in disruptive innovation).

For a long time BHS has been in decline. So its failure, after 88 years in business, is hardly a big surprise. So what went wrong? A summary from numerous experts.

INNOVATE: It’s a classic example of a business that failed to innovate and keep up. From its retail model to technology, it lagged behind. In an era of ‘disruptive innovation’ BHS was anything but.

INTERNAL CULTURE: Despite having hired numerous consultants, few were listened to and the internal culture did little to cultivate an adventurous, inventive spirit.

MARKETING: Failure to invest in decent marketing (Green doesn’t believe in advertising). There’s a famous story about he he insulted a top ad agency with a £20 note (and a lot of arrogance).

COMPETITION: BHS wasn’t competing with brands like Primark or Zara, let along traditional brands like M&S. Brands like Debenham, House of Fraser, John Lewis all invested in reforming their business and image. Plus it was loosing ground to online competition.

BRAND: Image was old fashioned, a bygone era – very poor branding. It’s audience had become an older shopper, BHS failed to engage a younger audience. BHS was a family brand, which Green didn’t understand, unlike TopShop with its disposable fashion for youth. Stores were out-dated, “it was like walking into something from the 70s.”

PENSION FUND: There is an estimated £100m black hole in pension fund, with such a great liability it has made it very unattractive to investors.

BRICKS & MORTAR: BHS was locked into a number of onerous property leases that were draining it of resources.


A few facts:
BHS has about £1.3bn in debts, including a £571m pension deficit.
BHS has over 11,000 employees. The chain had 171 stores in the UK, with 88 across Russia and the Middle East.
BHS now joins a growing list of retailers that have fallen into administration, joining the ranks of Woolworths, Jane Norman, JJB sports, HMV, Phones4U, Blockbusters…
Find out more about ‘Disruptive Innovation’ at:

Disruptive innovation.

Did you know that the average length of a company’s life use to be 75 years and is now just 15.

More established companies (over 50 years old) have gone bust in the last 10 years than at any other time in history. Including the world’s oldest business that was 1400 years old.

88% of companies in the top 500 list, 50 years ago, no longer exist.