BHS is close to securing a lifeline from Gorden Brothers, as its creditors backed a rescue package which will reduce the company’s rent obligations and allow the retailer to walk away from some stores (1).
Over 95% of creditors backed BHS’s Company Voluntary Agreement (CVA), the approval of which secures the short-term future of the company’s 10,000 staff. (2). The company had previously warned that it would be forced into administration should the CVA not be approved. The Pension Protection Fund, a government-backed scheme, has started a takeover of the BHS pension scheme, which has a deficit of £571m, as the company is not expected to be able to keep up with its debts (3).
BHS was purchased for £200m in 2000, although it was sold to Retail Acquisitions Group for £1 last year. The company currently has debts of more than £1.3bn (4). The plan is believed to be a credible plan to allow BHS to enact a turnaround.
Darren Topp, CEO of BHS, stated: “We are delighted that we have the support of landlords and creditors. But we are under no illusions. This is the start. Me and my team now have to roll our sleeves up.
“We want to make it an iconic British brand again. There will be no popping Champagne corks tonight. We would like the British public to give us a second chance. Come and see our stores and you will be surprised.” (2)