Retailer BHS Goes Into Administration
A total of 11,000 jobs are at risk at the high street chain, which will "continue to trade as usual" while a buyer is sought.
Monday 25 April 2016 09:38, UK
High street chain BHS has gone into administration, putting 11,000 jobs at risk and threatening the closure of up to 164 stores.
In a statement, administrators Duff & Phelps said the group will "continue to trade as usual" while a buyer is sought.
The collapse is the biggest retail failure since Woolworths folded in 2008 with the loss of almost 30,000 jobs.
The owner of BHS, Dominic Chappell, said "no one is to blame" for the retailer's failure, and said he would continue to work with the administrators to "find a solution".
In a statement, 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.
"The group will continue to trade as usual whilst the administrators seek to sell it as a going concern."
As well as stores remaining open for the moment, all online orders will be processed as usual.
For now, no member of staff has been sent home, and employees' situations will be "worked through in due course", Sky News has been told.
Reacting to the news, John Hannett, general secretary of the shopworkers' union USDAW, told Sky News: "The key thing now for my members and the 11,000 individuals affected by the announcement, is for an open dialogue so we can investigate, research the opportunities.
"This is devastating for these individuals, devastating for the families, and we must do everything we can to support them."
BHS was bought last year by a consortium of financiers, led by Mr Chappell, known as Retail Acquisitions from Sir Philip Green, who agreed the sale for £1.
The retailer has debts of more than £1.3bn, including a pension fund deficit of £571m.
Sir Philip is reported to have offered £80m towards the cost of the pensions, though the regulator could still pursue further payment from the retail billionaire, who bought BHS for £200m in 2000.
Sports Direct is understood to want some of BHS' stores, but will only do so if it does not have to take on any pension liabilities.
It is thought that, along with Sports Direct, up to 30 other retailers may look at buying either a slimmed-down version of the business out of administration or pick over its store estate.
The failure of BHS is likely to raise questions about the company's financial stewardship and the role of its directors.
Retail experts say the chain has suffered from years of under-investment, leaving its range and estate looking tired.
Analyst Judi Bevan said BHS has suffered the same fate as Woolworths, becoming "not relevant any more to people".