BHS collapses into administration with 11,000 jobs under threat

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The BHS department store chain collapsed into administration today in the biggest high street failure since Woolworths in 2008.

Hundreds of London jobs at 13 stores and its Marylebone Road head office are at risk, while across the country as many as 11,000 jobs at 164 stores are under threat.

There are also fears for the retirement incomes of more than 20,000 workers in the BHS pension fund, which has a deficit of £571  million. 

The chain’s previous owner, billionaire Sir Philip Green, was today facing growing calls to increase his reported offer to contribute £80 million towards the fund.

Pension consultant John Ralfe told BBC radio this morning that Sir Philip’s offer “just doesn’t touch the sides” in terms of plugging the shortfall. Sir Philip, who runs the Arcadia chain, sold BHS for £1 last year to a group of investors called Retail Acquisitions.

Retail Acquisitions owner Dominic Chappell said: “No one is to blame. It was a combination of bad trading and not being able to raise enough money from the property portfolio.

“In the end, we just couldn’t reach an agreement with Arcadia over pensions.”

Meanwhile shoppers were urged to spend any unused BHS gift vouchers before they become worthless. 

Alex Neill, Which? Director of Campaigns, said: “Consumers need to be aware of their rights when a high street retailer goes into administration, particularly regarding gift vouchers. Our advice to anyone with a BHS voucher is to spend it as quickly as possible.”

The administration comes after the 88-year-old company’s owners failed to find £60 million in emergency funding needed to pay  wages and rent, after last-ditch talks over the weekend.

 

BHS, originally known as British Home Stores, was formed in Brixton in 1928 as a home-grown alternative to the then American-owned Woolworths, with the promise of selling nothing priced at more than a shilling.

But it lost its way in recent years, losing a combined £400 million since 2009 and building up debts of £1.3  billion.

Retail consultant Phil Dorrell 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.”

He added: “There won’t be a retailer to buy BHS wholesale. Expect a piecemeal sale of specific sites in strategic locations to John Lewis possibly or Sports Direct or Next.”

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Source Article from http://www.standard.co.uk/business/business-news/bhs-collapses-into-administration-with-11000-jobs-under-threat-a3232946.html

April 26, 2016 |
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