DUFF & PHELPS has been appointed as administrators to struggling retail chain BHS putting around 11,000 jobs at risk.
Dominic Chappell, of owners Retail Acquisitions, issued a letter to all its staff to explain that the business will now be put in the hands of administrators having failed to secure a rescue package.
In a statement, Duff & Phelps said: “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. 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 group will continue to trade as usual whilst the Administrators seek to sell it as a going concern.”
In March 2015, retailer Philip Green announced that he was selling BHS Group Ltd, which he had owned for 15 years – to little-known Retail Acquisitions, itself formed just a few months earlier, for £1.
Sports Direct is believed to have expressed an interest in cherry-picking some of BHS’s 164 stores, but did not want to underwrite its massive pension liabilities, while weekend talks collapsed.
The latest twist comes just weeks after the BHS won a stay of execution after landlords and other creditors agreed to a restructuring plan that will dramatically slash its rent bill.
The High Street chain of department stores – saddled with £1.3bn debts –secured around 95% of creditor backing for its CVA – handled by KPMG – which sought to divide BHS’s 164 store portfolio into three main categories, based on the commercial viability and strategic importance of each site.
Over 75% of creditors had to vote in favour of each CVA to pass the resolutions.
BHS has also transferred its substantial pension liabilities of £571m into the Pension Protection Fund, the government-supported rescue agency.
The retailer’s administration will be the biggest since Woolworths in 2008.
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