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BHS Goes Into Administration

BHS Goes Into Administration

Published by the Pirate FM News Team at 12:39pm 25th April 2016.

High street chain BHS has gone into administration, putting 11,000 jobs at risk and threatening the closure of up to 164 stores, including its branches in Truro and Plymouth.

In a statement, the administrators Duff & Phelps said the group will continue to trade as usual while a buyer is sought.

The collapse is the biggest retail failure since Woolworths folded in 2008 with the loss of almost 30,000 jobs.

The owner of BHS, Dominic Chappell, said "no one is to blame" for the retailer's failure.

Mr Chappell told the Press Association: "No one is to blame, it was a combination of bad trading and not being able to raise enough money from the property portfolio.

"In the end, we just couldn't reach an agreement with Arcadia over pensions."

He will continue to work with the administrators to "find a solution post the administration", he added.

In a statement, Duff & Phelps said: "The group (BHS) has been undergoing restructuring and, as has been widely reported, the shareholders have been in negotiations to find a buyer for the business. These negotiations have been unsuccessful.

"In addition property sales have not materialised as expected in both number and value. Consequently, as a result of a lower-than-expected cash balance, the group is very unlikely to meet all contractual payments.

"The directors therefore have no alternative but to put the group into administration to protect it for all creditors. The group will continue to trade as usual whilst the administrators seek to sell it as a going concern."

BHS was bought last year by a consortium of financiers, led by Mr Chappell, known as Retail Acquisitions from Sir Philip Green, who agreed the sale for £1.

The retailer has debts of more than £1.3bn, including a pension fund deficit of £571m.

Sir Philip is reported to have offered £80m towards the cost of the pensions, though the regulator could still pursue further payment from the retail billionaire.

He bought BHS for £200m in 2000.

Sports Direct has been in talks to buy some of BHS's stores, but there are reports it does not want to take on the company's pension deficit.

The chain was given a lifeline last month when creditors backed two company voluntary arrangements (CVAs) designed to revive the ailing business by cutting the cost of its leases and preventing widespread store closures.

But the deal hit a snag last week when a £60m loan, making up a crucial part of the deal, was not secured.

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