Some very sad news just coming in this afternoon
BHS To Cut Jobs And Put Some Stores Into Administration
There are around 220 jobs to be cut in-stores and 150 in head office as they are forced to make cut backs.
BHS was last year sold by Top Shop boss Sir Philip Green for £1 to a little-known investment group called Retail Acquisition.
The new owner has filed a company voluntary arrangement (CVA), a type of insolvency proceeding, in an attempt to push through a restructuring of its finances based around reducing rents with many of its landlords.
BHS has identified 40 stores at which it says it needs to reduce its rent by a quarter for the next 10 months while it negotiates new deals with landlords. This includes stores in my home town of Newcastle, including many more around the country.
Will Wright, a restructuring partner at KPMG and proposed supervisor of the CVA, said: “For almost 90 years, BHS has been one of the most iconic brands on the UK high street, but in recent years has seen its profitability decline as it has sought to respond to changing customer behaviours, increased competition and the rise in omni-channel retailing. Today’s CVA proposals are one facet of a wider turnaround plan, and specifically tackle one of the business’ largest fixed costs, the onerous lease arrangements across its UK-wide store portfolio. While the company’s store estate is located across favourable retail locations, a number of these leases are unsustainable, predicated on terms which were originally negotiated some decades ago. With the support of its lenders, shareholders and landlords, the company will be able to reshape its debt and operational structure to a model more suited to today’s multi-channel retail environment. The company needs to secure at least 75% creditor approval for these CVAs.”
Darren Topp, the chief executive of BHS said “BHS will continue to trade as usual and we thank our staff and customers for their continued support.”