Administrators of trouble department store chain BHS has confirmed the business will be ‘wound down’ after failing to find a buyer for the whole of company, ending its 88 years on the High Street.
BHS will close all of its 163 stores as it enters into a ‘closing down mode’, effectively making 8,000 of its 11,000 staff redundant. The remaining 3,000 jobs, which work in the stores but are not BHS employees, are also at risk.
Philip Duffy and Benjamin Wiles, managing directors of Duff & Phelps, were appointed as administrators on 25 April 2016 and have been working tirelessly to save BHS, however no deal could be reached as the offers received were unable to meet the ‘working capital required’ to secure the future of the business.
It is understood that Hilco Retail Services has been appointed to assist in the process of winding down BHS, which has reported debts of over £1.3bn.
It was reported that a number of bids were tabled, including one from the Richess Group, a Portuguese consortium, as well as a joint effort from Matalan founder John Hargreaves and Select Fashions owner, Cafer Mahiroglu – although the latter appeared to retreat its offer, with no bid suitable to agree a sale.
Philip Duffy, managing director of Duff & Phelps and Joint Administrator, said: “The British high street is changing and in these turbulent times for retailers, BHS has fallen as another victim of the seismic shifts we are seeing. The tireless work and goodwill of the existing management team and employees of BHS with the support of my team were not enough to change the fortunes of the company.”
With the news of BHS winding down, it could tempt previous interest from Sports Direct, B&M and IKEA to bid for a number of BHS stores, with the latter confirming to Cabinet Maker last month that it would not bid for the whole BHS business but would consider ‘potential locations’.
The statement from IKEA said: “I can confirm that we have not and will not be bidding to buy the BHS business out of administration. However, we are exploring a number of other potential locations across the UK for more order and collection points. At the current time we have nothing further to confirm while discussions are ongoing.”
Duff and Phelps also added: “Our thoughts today are with the employees. We thank them for their professionalism and hard work. We would also like to thank the great British public for helping us in our efforts to save BHS resulting in several weeks of significant sales.”