People walk past the headquarters of retailer British Home Stores after it was announced that BHS is to be wound down after administrators failed to find a buyer for the 88-year-old retailer, in central London, Britain June 2, 2016. REUTERS/Peter Nicholls
LONDON: British department store chain BHS is to close with the loss of up to 11,000 jobs, administrators said Thursday after failing to find a buyer.
BHS, which sells clothing, food and homeware, has failed to keep pace with traditional rivals such as Marks & Spencer and online giants like Amazon, resulting in a major loss of market share.
“Philip Duffy and Benjamin Wiles, managing directors of Duff & Phelps (the administrators) have today announced the orderly wind down of the BHS business,” a statement said.
The 88-year-old company’s 163 stores will enter “close-down sale mode” over the coming weeks following failed last-ditch rescue attempts by former Mothercare boss Greg Tufnell and Mike Ashley’s Sports Direct.
A total of 11,000 jobs are in peril, comprising 8,000 BHS employees who are “likely to go”, with another 3,000 non-BHS staff also at risk.
“Despite the considerable efforts of the administrators and BHS senior management it has not been possible to agree a sale of the business,” the statement added.
“Although multiple offers were received, none were able to complete a deal due the working capital required to secure the future of the company.
“Our thoughts today are with the employees. We thank them for their professionalism and hard work. We would also like to thank the great British public for helping us in our efforts to save BHS resulting in several weeks of significant sales.”
BHS had called in outside help last month in order to help rescue the struggling firm from potential closure.
Pension fears
However, Duff & Phelps was unable to turn around the fortunes of the faltering retail giant.
“The British high street is changing and in these turbulent times for retailers, BHS has fallen as another victim of the seismic shifts we are seeing,” said Philip Duffy, managing director of Duff & Phelps.
“The tireless work and goodwill of the existing management team and employees of BHS with the support of my team were not enough to change the fortunes of the company.”
According to retail consultancy Conlumino, BHS attracted some 13.4% of all British clothing shoppers through its doors fifteen years ago, and had about 2.3% of the clothing market.
Last year however, BHS pulled in just 8.2% of clothing shoppers, handing it a 1.4% share of the sector.
BHS has debts totalling more than £1.3bil (RM7.8bil), including a £571mil (RM3.4bil) deficit to its pension fund, which looks after the nest eggs of over 20,000 savers.
The collapse has shone the spotlight on previous owner Philip Green, the Top Shop tycoon.
MPs are set to question him about a £400mil (RM2.4bil) dividend paid to his family from the business, which he sold last year to Retail Acquisitions for a token 1.
He also faces questions about the pension scheme, which boasted a surplus when he took over 16 years ago.
Starting in 1928 with a chain in London, BHS has since grown to stand at 163 stores and 74 franchise operations across 18 countries. - AFP
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