BHS on the brink of death
British Home Stores (BHS) have filed for administration, which puts 164 shops and around 11,000 jobs at risk.
Administrators Duff & Phelps are now going to try and find a buyer for the business.
While that happens, BHS will continue to trade.
The company have said that they had "no alternative but to put the group into administration".
It is thought that high street stalwart, BHS, is going to file for administration this week - it might even happen today, putting around 11,000 jobs at risk.
We've spoken about the woes faced by BHS before, and things don't seem to have improved. When asked, a spokesperson for the firm said that a statement is expected "about BHS's future", but there's not much more to go on at the time of printing.
How have BHS got in so much trouble? The main one is that they've failed to keep up with the rest of the high street, and in addition to that, the unfocused rebranding as seen some stores getting facelifts, with others left as they were.
Sir Philip Green, the retail svengali, sold the chain last year for £1. However, any new buyers that might be interested in this acquisition will have to take on BHS' £571 million pension deficit.
Is anyone going to want that? Well, Sports Direct have apparently been in talks with the company, but the pension funds is going to be a huge sticking point.
The current owners, Retail Acquisitions, have previously stated that were willing to inject £160 million, to turn thins around, but thus far, they haven't been able to generate such an amount.
BHS sold their Oxford Street lease in London for £30 million, which wasn't as much as they'd expected to get. They also sold the lease on a property in Sunderland to Sports Direct's Mike Ashley for £2 million. It isn't enough money to get things sorted, however.
Only last month, BHS sidestepped death, after creditors allowed the company to cut their rent bills for a number of stores.
The company has debts of over £1.3 billion (which includes the aforementioned pensions deficit).
Today, it looks like an insolvency firm will be called in to sort out the administration, and the most likely candidate is a company called Duff & Phelps.
As for the pensions themselves, they're being assessed by the Pension Protection Fund (PPF), which is a safety cover for any plans that have been hosted by companies that are insolvent. It usually means a cut in the value of pensions, but they won't vanish entirely.
It'll be a difficult week for the staff at BHS, that's for sure, and unless there's a miracle, BHS will have a new owner this week. We're inevitably going to see a fire-sale, with shops sold off and a gradually erosion of the BHS name from the high street.
TOPICS: High Street News