BHS near to collapse with 11,000 jobs at risk
HIGH street retailer BHS is on the brink of collapse and could file for administration as early as Monday, following standoff between its owner and one of its biggest lenders.
Former BHS majority stakeholder and Topshop owner Sir Philip Green sold BHS to current owner Dominic Chappell.
Mr Chappell, a former racing driver, was found to be behind Retail Acquisitions, which had acquired BHS for £1 last year.
Sir Philip Green remains one of the business’ biggest lenders, but has reportedly refused a last ditch attempt from Chappell to save the business, calling it “inadequate.”
Talks were ongoing with the Mike Ashley vehicle Sports Direct to acquire some of its 164 stores, but according to The Sunday Times, these talks stalled over the weekend due to pension debt.
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.
David Gill, Usdaw national officer said: “We are seeking urgent clarification from the company and urging them to change their attitude to trade unions and begin a dialogue with us at this difficult and worrying time for staff.”
Analysts at Retail Economics have said that consumer behaviour is evolving at a faster pace than retailers such as BHS can keep up with.
Richard Lim, chief executive at Retail Economics said:”BHS is an example of a traditional British high street retailer who is burdened with too many stores with an excessive exposure to our dwindling high streets.
“They have been unable to adapt fast enough to the new dawn of consumerism which is being driven by the widespread adoption of digital and mobile technologies. These traditional retail business models are no longer fit for purpose.”
Phil Dorrell, partner at analysts Retail Remedy said: “We might love the BHS brand but when was the last time you shopped in a store? Lose sight of your customer and you lose sight of your business.
“The attention has all been on the debts of the business but the ongoing strategy of BHS has been neglected. There isn’t a reason to shop there. The supermarket offers tick all the boxes that BHS once owned and without a radical change in proposition there just isn’t a space for BHS to occupy.
“Sadly this is probably the beginning of the end for BHS on our High Streets. It would take a brave and innovative business to buy the brand and turn it into an ongoing concern.”
