BHS and Tata demonstrate the ‘half-life’ of big business stories
The BHS story, noticed by 42% of British adults, has remained the most, or second most, significant business story for five weeks. The retailer entered administration at the end of April putting 11,000 jobs at risk in the biggest high street bust since the collapse of Woolworths in 2008. An ill-tempered post-mortem of the business is being played out in the press this month.
Having sold BHS for £1 to Dominic Chappell’s Retail Acquisitions group in March 2015, Sir Philip Green, rejects responsibility for the company’s failure. He suggests that the responsibility lies with Chappell saying, “If I give you my plane, right, and you tell me you’re a great driver and you crash it into the first f****** mountain, is that my fault?”
However, the highstreet magnate is not off the hook. A joint Business and Work and Pensions select committee is investigating the role that BHS directors and advisers played before the retailer was sold. The Government’s Pensions Regulator, which has the power to pursue former owners of businesses if it thinks they have a responsibility to members of their schemes, has also launched a formal investigation.
However, businesses are inevitably bumped back into the news, often by tangential stories, as HSBC’s relatively innocuous domicile review and Tata’s routine shortlisting of potential buyers for its UK steel operations show. The result is that old wounds re-open and negative perceptions re-surface.
Like aftershocks following an earthquake, these spikes in public consciousness tend to erupt again and again while the original issue remains unresolved. The beleaguered Royal Bank of Scotland (RBS) is an example of just how damaging these relentless aftershocks can be. Since its infamous bailout by the UK taxpayer in 2008, the bank, like most of its competitors, has been hit by IT failures, PPI miss-selling, and interest manipulation scandals. While the reputations of all banks are tarnished every time another example of banking misconduct is uncovered, RBS’s reputation has been hit the hardest and it is the slowest to recover. It has become the poster boy for bad banking behaviour because each time a new story emerges, people are reminded of the debt that the bank owes to the taxpayer and outrage is re-ignited.
Tragedy of flight 805 shoves EgyptAir into the news
Sometimes companies associated with tragic events are propelled into the news. On 19 May, the crash of EgyptAir flight MS805 into the Mediterranean Sea and the deaths of all 66 people on board is one such example.