With BHS officially collapsing into administration only yesterday, does this spell trouble for the rest of the UK’s high-street retailers? BHS, which employs over 11,000 people, is the largest retailer to fall since Woolworths went bust in 2008. It is an 88 year old company most recently bought by Phillip Green in 2000 for £200 million and then subsequently sold in 2015 for just £1 to Retail Acquisitions. Having managed to lose money for the past 7 trading years, was its demise only a matter of time or is there a recurring pattern emerging here?
If we look at Next, arguably described as the most successful high-street retailer, we see a confirmed online presence as well as a visible presence on most UK high streets. This dual angle undoubtedly gives them an advantage. However, if we look at share price performance over the past 6 months you will see a worrying trend: shares are down from a peak of £81.75 to £51.45 today – down some 37%. Does this pose a buying opportunity in valuation terms or is it the beginning of something more negatively serious?
Jordan Hiscott, Chief Trader
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