What a bad few days it has been for retail. Following the parliamentary censure of SportsDirect comes the first report into BHS. The worry was that they would produce a white wash. They haven’t. This is a forensic investigation with some deeply uncomfortable conclusions, predominantly for Sir Philip but also for many others. Reading the report, its straight-from-the-shoulder conclusions are validated by evidence and painstaking research. To say this reflects badly on retail and business doesn’t come close. The Select Committees are to be applauded.
Retail has two fundamental constituencies: staff and customers. For many years the industry has taken both for granted. I have written recently about the need for retail businesses to treat staff less as a cost and more as an asset. Treating staff well should be a moral imperative, but it also makes good business sense. Indeed, the way retail economics are evolving, survival in this overcrowded market will be increasingly about the relationship between staff and customers.
In my opinion the Select Committees are right to attribute most of the blame to Sir Philip. However, there must be a root and branch review of areas like corporate governance (all packaging in this case), advisors (setting a new definition of being economical with their versions of events) and pensions rules (more packaging and box ticking, providing no protection whatsoever to employees). There need to be tighter rules around insolvency and tax. There need to be tighter rules about the stewardship of companies and the responsibilities that go with employing people.
Some good can come out of this. There needs to be clear and decisive follow through on the key conclusions of the report, sooner rather than later. And there need to be rules and procedures put in place to protect staff and pensioners and prevent irresponsible individuals (owners, acquirers, advisors) from riding roughshod over people.
** We advise leadership teams in and around retailing on strategy, analytics and forecasting