BHS threatens to close half its stores putting hundreds of jobs at risk

Closed Shop Sign

BHS is threatening to close up to half its shops as the cash-strapped retailer tries to negotiate a reduction in rents with its landlords.

It is understood that BHS has told landlords it wants to close between 50 and 60 shops, and could close another 30 if landlords do not reduce the rents.

The shop closures would put hundreds of jobs at risk if BHS presses ahead with its threat.

An announcement is expected from the company about its plans within days. It is likely that BHS will use a company voluntary arrangement, a type of insolvency proceeding, to close the shops.

The retailer is being advised by KPMG, the accountancy firm, and they have been in discussions with landlords for several weeks about how to cut the retailer’s rent bill.

BHS wants to close the struggling stores to help fund a turnaround plan for the rest of the business. The retailer, which has 165 stores, is looking to install food departments in its shops and modernise them.

Sir Philip Green, the retail tycoon, sold BHS for £1 in March to a little-known collection of financiers, lawyers and accountants. Concerns about the future of the retailer, which employs more than 10,000 staff, have grown since then.

It emerged that Dominic Chappell, who led the buyout, is a former bankrupt and that credit insurers were refusing to support BHS’s suppliers, meaning the retailer had to pay upfront for stock.

BHS declined to comment about its store plans.

Powered by Guardian.co.ukThis article was written by Graham Ruddick, for theguardian.com on Thursday 3rd March 2016 16.16 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010

 

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