Retail tycoon Sir Philip Green has finally washed his hands of BHS, selling the troubled fashion and homewares chain to a little-known group of City investors for a token £1.
The venerable business which employs 11,000 people but lost £70m last year is believed to have been sold for the sum, although spokespeople for both sides declined to confirm the price.
Green, the billionaire owner of the Arcadia group, has owned the chain for 15 years but said control had on Thursday passed over to Retail Acquisitions, a company created last year to buy BHS.
The new owners are talking to Harriet Green, the businesswoman credited with bringing Thomas Cook back from the brink, to take on the role of chair, as well as two or three other candidates with turnaround expertise.
Sir Philip Green acquired the then British Home Stores in 2000 for £200m, but put the business up for sale in January after years of rumours that he was looking to offload the loss-making chain.
BHS reported a 3.5% fall in sales to £675.7m in 2013, despite narrowing its pretax losses to £69.9m from £116m in 2012.
Founded in Brixton in 1928 by a group of American entrepreneurs who wanted to create a British Woolworth’s, British Home Stores became a stalwart of the British high street. But it has lost its appeal to its core female customers and has been criticised for failing to adapt to online retail.
“BHS has struggled in the face of increasing competition in recent years, particularly from lower-priced fashion retailers,” Simon Horner, head of fashion at Kantar Worldpanel.
The new owners will get BHS’s 171 UK stores in the UK and 88 franchise stores in Russia and the Middle East.
A spokesperson said: “There are no big closure or redundancy plans. It is very much about driving the business forward and growing it over time.”
The new owners are said to be keen to expand BHS’s food store, putting the chain in competition with Marks & Spencer’s successful Simply Food. BHS Food is being trialled in three stores, but is likely to expand to 140 outlets.
The new owners are also expected to expand BHS’s homeware sales. Clothes concessions from Green’s Arcadia Group, such as Dorothy Perkins, are likely to remain fixtures of BHS stores from some time.
Although the sale of BHS was expected, the unknown buyers left retail watchers scouring the internet.
Retail Acquisitions was founded by a group of lawyers and businessmen in November 2014 as Swiss Rock Ventures, before taking on its current name in March.
The venture, which has serviced offices in London’s West End, is chaired by Keith Smith, a former executive at corporate finance house Nabarro Wells.
Another founding director, Dominic Chappell, 48, is said to have got the deal rolling through his business contacts with Green. Other company directors include Lennart Henningson, a Swede, and British lawyers, Edward Parladorio and Mark Tasker.
Green said: “The business is handed over in a sound financial position with significant cash balances and banking facilities in place. I am confident that Retail Acquisitions Limited have a platform to grow the business and return it to profitability.”
Retail Acquisitions said it planned to appoint a BHS chairman “with significant retail experience” as well as other retail turnaround experts in due course.
“This is a fantastic opportunity to breathe new life into this iconic British high street brand,” said Keith Smith, Retail Acquisitions chairman.
“We are convinced that with strategic and focused support we will return BHS to profitability and safeguard the workforce.”
Horner said BHS has lost almost 800,000 shoppers in the past five years and been overtaken by John Lewis, TK Maxx and Sainsbury’s in the ranking of Britain’s largest fashion outlets.
“BHS is still performing well among its traditional customers, those aged 55 and over. Over half of its sales come from this older demographic which accounts for nearly a third of all fashion spending in Britain.
However, this age group is choosing to follow younger fashion trends so BHS will need to refocus its offer to continue to appeal to these shoppers.”
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