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Tuesday, 1 April 2014

Sir Philip Green's Lottery Tickets

"Maybe it's an opportunity.."
Commenting on BHS's move into food retailing, Sir Philip Green said "On the basis that everyone is going into the high street and convenience, maybe it's an opportunity. If you don't buy a ticket, you can't win the lottery."

Given M&S and Waitrose have already made such a success of premium food retailing, the move into food isn't surprising. The £1 round pound price pointing is.  

Tied to brands, lower prices than the majors, Booker's supply chain and a maximum 50 BHS outlets selling food in the next six months, there doesn't seem to be a whole lot of money to be made...Hardly a lottery win.. and Sir Philp has no passion for food retailing, never has. So why jump into the UK Grocery price war unnecessarily?

Green bought BHS in 2000 for £200million and has been re-shaping it ever since. In 2006 he began discussions with Asda and Debenhams to sell BHS but market conditions were just too tough, the timing wrong. In the intervening years, absorbed inside Arcadia,  a number of stores were sold off to Primark, the discount clothing retailer. 

When Green says "everyone is going into the high street and convenience" - his "everyone" is other retailers. The real lottery tickets are BHS' outlets.

Re-enter Asda. The George clothing range could plug and play into existing BHS stores, their grocery supply chain can deliver low price food everyday....The environment is still tough but Asda are now looking for growth beyond superstores. It's all about the timing..

The "for sale" sign has been nailed over the BHS estate. Sir Philip just needs to grab some attention and prove BHS stores can sell great value food to price conscious shoppers to sell BHS to Walmart. "Maybe it's an opportunity". 
Winning lottery tickets indeed!

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