Brand BHS safe for now as creditors throw it a lifeline
BHS has been thrown a lifeline, as creditors of the embattled retailer voted to allow a cut in rents for some of its UK stores while the lease on its flagship Oxford Street store will be sold for £30m.
The rent proposal is part of a wider plan to try and turn the business around after being sold by Sir Philip Green last year for just £1.
Currently owned by Retail Acquisitions – a consortium of financiers, lawyers and accountants – the high street giant has amassed debts of more than £1.3bn after seven consecutive years of loss-making.
The agreement will mean that rent across 47 stores will be cut by as much as 75 per cent while 77 of its better performing shops will pay rent as normal although in monthly rather than quarterly instalments.
Around 40 of its remaining stores will continue trading for 10 months with rent reduced by 25 per cent.
"This gives BHS the opportunity to move forward,” said chief executive Darren Topp, BHS's chief executive. "It is a tough time for retailers across the UK with huge structural challenges faced by all, however, we have a very credible plan to return BHS to growth and profitability and a revitalised British Home Stores will emerge as we accelerate our turnaround plans."
If the agreement hadn’t been forged today then BHS would have been placed into administration, threatening the jobs of some 10,000 workers.