London: BHS will be liquidated, consigning the 88-year-old British retail chain to history and leading to as many as 11,000 job losses after efforts to find a buyer failed.
None of the multiple potential purchasers were able to complete a deal due to the “working capital required to secure the future of the company,” administrator Duff & Phelps said in a statement on Thursday.
The collapse of BHS has sparked public outrage and a parliamentary inquiry to establish how the retailer’s pension liabilities were allowed to swell to £571 million (Dh3 billion). Billionaire Philip Green pocketed £420 million in dividends before selling BHS last year for one pound to Dominic Chappell, the former race-car driver with no retail industry experience who failed to turn the chain around. The liquidation will increase the scrutiny around Green’s scheduled appearance at a parliamentary hearing on June 15.
Duff & Phelps said all 163 BHS stores will be “in close-down sale mode” over the coming weeks. The jobs of 8,000 employees are likely to be lost, while a further 3,000 positions held by non-BHS workers may also be at risk, the administrator said.
Austin Reed
BHS becomes the second British retail stalwart to disappear from the country’s high street in quick succession, after administrators also announced this week that 116-year-old formalwear chain Austin Reed will be liquidated. The chain’s outlets offer everything from clothing and lighting to luggage, which have become readily available from online retailers, discounters and supermarkets.
“The British high street is changing, and in these turbulent times for retailers, BHS has fallen as another victim of the seismic shifts we are seeing,” Philip Duffy, managing director of Duff & Phelps and joint administrator, said in the statement.
The retailer, which opened its first store in London almost nine decades ago, has struggled to grow sales against a backdrop of mounting competition and burdensome debt. In the event of liquidation BHS owes about £1.3 billion pounds to more than 1,200 creditors, according to a court document published in March.
Attractive locations
The creditors include a range of landlords, suppliers and delivery companies. Among them is Green’s Arcadia Group, which is owed about £2 million. Duff & Phelps is required to produce a report to creditors within the next few weeks, featuring an estimate of the funds they have found in the company which are available for distribution.
BHS’s stores are likely to attract buyers given their “fundamentally good central locations,” said Jonathan De Mello, head of retail at property consultancy Harper Dennis Hobbs. Discounters such as Aldi, Lidl and TK Maxx will probably be interested, he said.
