BHS enters administration after talks stall
HIGH street retailer BHS has officially entered administration, putting 11,000 jobs at risk.
Administrator Duff & Phelps has confirmed it has placed BHS into administration after a last-minute rescue deal collapsed.
A statement from Duff & Phelps said: “The group (BHS) has been undergoing restructuring and, as has been widely reported, the shareholders have been in negotiations to find a buyer for the business.
“These negotiations have been unsuccessful. In addition property sales have not materialised as expected in both number and value. Consequently, as a result of a lower than expected cash balance, the group is very unlikely to meet all contractual payments.
“The directors therefore have no alternative but to put the group into administration to protect it for all creditors.”
BHS boss Darren Topp had been in meetings with Sports Direct’s Mike Ashley all weekend, but hopes of Ashley stepping in to save the company faded last night after Ashley expressed fears about the black hole in BHS’s pension plan and the size of its debt.
BHS was bought by billionaire Sir Philip Green for £200m in 2000, but he sold it last year for just £1. It is now owned by Retail Acquisitions, a consortium of financiers, lawyers and accountants.
“The group will continue to trade as usual whilst the administrators seek to sell it as a going concern. Further announcements will be made as appropriate in due course.
BHS staff were told the news this morning that their jobs are under threat following the collapse into administration, but that they will still be paid this month.
Last month BHS was forced to plan a CVA. At the end of March landlords agreed a cut to its rent bills in 164 stores across the UK to aid the struggling retailer.
It had threatened landlords of 40 stores – including six in Yorkshire – that they will close unless they agree to receive 25% of the rent due in the next 10 months and negotiate rent reductions.
