UK retailer BHS was placed in administration today (25 April), putting almost 11,000 jobs at risk. Administrators Duff & Phelps said they will try to sell BHS as a going concern, with stores trading as usual and staff remain in roles, for now. The major retailer in Sussex, has seven stores, with locations in Brighton, Crawley, Chichester, Eastbourne, Horsham, Hastings and Worthing. Questions raised today include the possibility that BHS as a brand is in terminal decline. With brands like Primark taking increasing market share, is the distinction of the stores, particularly with regard to key areas of strength like lighting, now at an end? Today is the poor mans Marks and Spencers seeing the end of a history that began in 1928? Comparisons are being made with what happened to Woolworths eight years ago. Are 11,00 key retail jobs about to go across the country?—Bay Life, 25 April 2016
Digital Look reports: “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. These negotiations have been unsuccessful. In addition property sales have not materialised as expected in both number and value,” the administrators said in a statement put out at 1230 BST.
“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 company, sold by Arcadia owner Philip Green last year to the opaque Retail Acquisitions for £1, has debts of £1.3bn including a pension deficit of £571m. It had been seen as a High Street anachronism that failed to keep up with its competitors in an age of online shopping.
Discount retailer Sports Direct had been in talks over the weekend with Retail Acquisitions to buy some of BHS’s 164 stores, but these proved unsuccessful.
Talking to the Press Association, BHS owner Dominic Chappell said no-one was to blame for the failure of the business.
“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,” he told the Press Association.
He added that he will continue to work with the administrators Duff & Phelps to “find a solution post the administration”.
Green has allegedly offered to contribute £80m to the Pension Protection Fund, set up to meet some of the shortfalls in occupational schemes of companies that go bust. It is believed the fund may ask for more from the billionaire, who bought BHS for £200m in 2000.
According to Digital Look, retail consultants Retail Remedy said BHS had been “well off the pace” when it came to keeping up with customer trends.
“We are not talking about the last two years, we are talking about a decade ago, within Phillip Green’s ownership. BHS dragged their feet over going online, which left them playing catch up with their competitors, Debenhams and Next,” Retail Remedy said.
“But then the offer that they had to put online was not a leading offer, and their customers were not early adopters of ecommerce. Simply put BHS did not adapt.”
Not a great deal is known about the businessmen behind Retail Acquisitions. The BBC reported on Monday that the company had taken £8m out of the business not long after its purchase from Green.
The company was set up in November 2014, according to its Companies House filing, and was formerly known as Swiss Rock Ventures.
The four company officers are listed as Dominic Chappell, Edward Paladorio and Aiden Treacy.
Chappell is the majority owner. A former racing driver, he has been made bankrupt twice and entered into an individual voluntary arrangement once. His Island Harbour Holdings business, operating a marina and restaurant on the Isle of Wight, went into administration several years ago.
