BHS threatens ‘insolvency’ to cut costs

Tue, 09 Feb 2016 | ADMINISTRATION

BHS is considering placing parts of the company into a form of insolvency, as the distressed business seeks to renegotiate the terms of leases at around 30 of its UK stores.

In an attempt to turn the business around, BHS owner Retail Acquisitions have brought in KPMG over the last couple of weeks to advise on its options and is now considering closing several of its 160-plus stores across the UK, many of which the retailer says cost several times the market rate.

Landlords have since been told that Retail Acquisitions may use company voluntary arrangements (CVAs) to cut costs. However, using a CVA would be seen as a controversial move, as it involves asking landlords to elect to receive a lower rent as a measure to prevent store closures.

BHS was bought by Retail Acquisitions from Sir Philip Green last year for £1. The new owner has already closed six stores in an attempt to turn the British business around, but now it looks likely that further store closures will follow, as the retailer aims to significantly cut costs and deal with a pensions deficit of more than £200 million.

The number one method to reduce costs according to KPMG involves renegotiating the amount of rent that BHS pays on a portfolio of some 30 stores across the country, including one store in the north of England, which the retailer is claiming costs four times the market rate.

A spokesman for the company stated: “BHS has stated publicly many times since the acquisition that it would like to take steps to address a number of unprofitable stores. This may involve discussions with some landlords and KPMG will help us in this process.

“Our turnaround plan is still in its first year. Although we still have a long way to go, we are entirely confident that we will regain our place as an iconic British high street brand.”


View the latest businesses in administration.


Share this article



Latest Businesses for Sale

Private Hire Taxi Company
North of England, UK Wide

Specialises in providing fast, reliable and trustworthy private hire transport services using a modern and maintained fleet for the public, commercial and corporate sectors. Service offering is enhanced through an industry-leading smartphone applicat...

Asking Price: Offers Invited
Turnover: £5,600,000

LEASEHOLD


Home Care Franchise
Mansfield, Nottinghamshire, East Midlands, UK

The franchisor offers a white-collar management franchise focusing in the dynamic multi billion pound care and support market. The role of a franchisee is one of working “on” the business, as opposed to working “in” the business – managing people, st...

Asking Price: £250,000
Turnover: £1,200,000

LEASEHOLD


Security Services Business
London, Buckinghamshire, South East, UK

Established business acquired as going concern in 2013 with excellent reputation for quality, service and reliability. An opportunity exists to purchase the business and assets of well-established security business. Long track record of profitability...

Asking Price: Offers Invited
Turnover: £1,900,000

LEASEHOLD



View more businesses for sale

News Search

Latest News

 
22
 
Jan
 

Jewellery retailer enters administration | ADMINISTRATION

A Nottingham-based jewellery and watches company has fallen ...

 
19
 
Jan
 

Luxury lodging group enters administration | ADMINISTRATION

An Essex-based company which operates eight luxury lodge par...

 
17
 
Jan
 

Fine paper business enters administration | ADMINISTRATION

Arjowiggins UK, which operates a number of trading companies...

Free guide: 10 Biggest Buyer Mistakes

Sign up to receive our acquisition alert emails to get your FREE guide

Email


Related News

 
05
 
Jan
 

Airline’s engineering arm enters administration | ADMINISTRATION

Monarch’s last surviving division has fallen into admi...

 
25
 
Oct
 

Yorkshire manufacturer completes MBO | MBO/MBI

Senior Architectural Systems, a window and door manufacturer...

 
16
 
Aug
 

Steel fabrication firm enters administration | ADMINISTRATION

Rippin Limited, a Scottish structural steel manufacturer, ha...

Want access to the latest businesses for sale?

Business Sale Report is your complete solution to finding great acquisition opportunities.

Join today to receive:

  • Comprehensive range of businesses for sale
  • Make direct contact with business sellers or their intermediaries
  • Access to all UK administrations, liquidations and winding-up petitions
  • Daily email alerts for the latest businesses for sale & distressed notifications
  • Business Sale Report publication posted to you every month
  • Advertise your acquisition requirements on our "business wanted" section

All this and much more, including the latest M&A news and exclusive resources