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Outline the economic arguments for and against British Home Stores BHS taking over Arcadia British Home Stores has grown from a single store in South London to a multinational retail company with a major presence both in the UK and later on in overseas clothing markets In 1986 they merged with HabitatMothercare to form Storehouse plc Then in May 2000 Philip Green bought Bhs from the Storehouse Group Green has been successful so far and has managed to turn the business around and increased the value of the business from 200m to an estimated 750m and raise operating profits by 257 percent After a failed attempt to takeover Marks Spencer earlier this year Green continued his ambition to expand his empire by moving in to takeover the Arcadia group which has a large portfolio of brands including TopmanTopshop Miss Selfridge Burton Dorothy Perkins Wallis and Evans The deal would complete a horizontal takeover and through external growth create the biggest fashion retail group in the UK A combination of Bhs and the Arcadia the UKs second largest retailer after Marks Spencer would catapult Greens retail empire into pole position in the womenswear market taking its share to 129 ahead of Marks Spencers 121 This would in turn increase the buying power of the company and leave Green in a position to take control of the fashion market sector With these points in mind there are both economic arguments for and against the takeover that I will evaluate and explain Firstly it can be argued that the takeover will bring a number of benefits to the economy in both the short and long run however there are sometimes trade offs which will lead to an economic argument against the takeover Mr Green and Bhs will argue that the takeover of the clothing retailer will bring the company economies of scale such as financial economies whereby the company will be larger so it will
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