High-street retailer BHS has gone into administration after last-minute rescue talks over the weekend proved unsuccessful.
The collapse, the biggest on the high street since Woolsworth in 2008, of the 164-store department chain has put the jobs of 11,000 staff at risk.
Insolvency firm Duff & Phelps has been officially appointed as administrator over the stricken retailer this lunchtime.
”The group has been undergoing restructuring and, as has been widely reported, the shareholders have been in negotiations to find a buyer for the business,” said Duff & Phelps managing directors Philip Duffy and Benjamin Wiles in a statement.
”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 will continue to trade while the administrators conduct a review of the business and try and find a buyer.
Sir Philip Green sold BHS to a consortium led by Dominic Chappell called Retail Acquisitions for £1 last year, with the new owners pledging to turn around the fortunes of the struggling chain. However, it has not been able to raise £160m of funding needed to deliver the plan.
In March, the loss-making retailer won a reprieve after creditors agreed to a rescue package by way of a Company Voluntary Arrangement (CVA) to reduce its rent liability. But with a pension fund deficit of £571m, the company has been facing an uphill struggle to attract new investment needed to save the business.
Sports Direct emerging as a potential white knight for BHS over the weekend but by Sunday it was clear that taking on the pension black hole was a stumbling block too far for Mike Ashley.
“The group will continue to trade as usual whilst the administrators seek to sell it as a going concern,” Duff & Phelps added. “Further announcements will be made as appropriate in due course.”
British Home Stores was established in 1928 and its website claims the chain performs on average one million transactions a week across 164 stores and 74 franchise stores across 18 countries.
No comments yet