BHS 'confirms it is going into administration'Comments Off on BHS 'confirms it is going into administration'
Beleaguered high street department chain BHS is to file for administration, threatening almost 11,000 jobs, it has been reported.
A spokesman for the firm had confirmed the widely expected move on Monday morning, Sky News said.
The retailer had sent a letter to staff, which said it will call in administrators after being unable to secure a rescue package to save the 88-year-old business.
A formal announcement is expected at around noon.
BHS was bought last year by a consortium called Retail Acquisitions for £1 from retail entrepreneur Sir Philip Green.
The retailer has debts of more than £1.3 billion, including a pension fund deficit of £571 million.
Rival retailer Sports Direct is understood to want to some of BHS’s 164 stores, but will only do so if it does not have to take on any pension liabilities. Talks over a deal over the weekend came to nothing.
Shopworkers’ trade union Usdaw said it was “seeking urgent clarification from the company”.
The collapse of BHS would be the biggest retail failure since Woolworths folded in 2008 with the loss of almost 30,000 jobs.
Retail experts said BHS has suffered from years of under-investment, leaving its range and estate looking tired.
The fashion and homewares chain was thrown a lifeline last month when creditors backed two company voluntary arrangements (CVA) designed to revive its ailing business by cutting the cost of its leases and preventing widespread store closures.
However, the deal hit problems last week when a £60 million loan, making up a crucial part of the deal, had not been secured.
Joe Rundle, head of trading at ETX Capital, said: “BHS may have been another Woolworths that struggled to adapt to the new retail world.
“But the same pressures that squeezed the life out of BHS are being felt across the UK retail sector today.”
Additional reporting by the Press Association
- More about: