BHS in plea to landlords for survival or thousands of jobs could go


On Thursday BHS entered into a train voluntary arrangement (CVA), a type of insolvency process, so it can restructure its liabilities.

It mentioned it is being crippled by onerous rents and it is looking to cut its monthly yments by 25 to 75 per cent at 87 out of its 164 accumulations.

The high-street stalwart, which employs close to 10,000 people, is being warned by restructuring experts at KPMG.

The accountancy firm has begun talks with the retailer’s hosts and other creditors, who will vote on the CVA on March 23, a week on the eve of its quarterly rent day.

A source close to BHS said that it and KPMG wish make it clear in talks that unless the landlords back the CVA and the hire out reductions, there will be serious consequences.

“We want the CVA to work. But if it is not agreed, then you’re looking at the dispensation route,” he said.

“With CVAs, its one of the strongest arguments you have for cold rents. Obviously the landlords will want to have reduced holes and thriving tenants rather than empty buildings.”

BHS also shortages its landlords to agree to monthly rents, instead of the current quarterly yments. It was y off by its current owners, investment consortium Retail Acquisitions, 12 months ago from retail billionaire Sir Philip Green for a nominal amount.

Led by chief executive Darren Top, BHS is scathing costs and has installed new concessions and food halls in a bid to win back customers.

Correspondence to its last set of accounts, BHS made a pre-tax loss of £85.1 million for the 12 months to August 30, 2014, in spite of having sales of £668 million.

Nick Hood, business risk confidante at Opus Restructuring, said: “A CVA fixes a bit of the problem, but it’s not a silver bullet. I desire it the best of luck, but I’m struggling to see how it can have a future.”

Elsewhere, WM Morrison chief president Dave Potts is expected to say that the supermarket giant is back in the felonious, when he announces its annual results on Thursday.

In 2014 Morrisons hinted a pre-tax loss of £792 million but, thanks to Potts’ stabilisation and turnaround project, the retail giant is understood to have made a profit of £300 million.

Potts was rachuted into Morrisons 12 months ago and it is given that although revenues for the year as a whole are down, sales picked up during the fourth casern and that it traded well over the festive period.

Shore Crown head of research Clive Black said: “Morrisons had positive exchange momentum over Christmas and while one swallow does not make a summer, it has stabilised. It is positively going in the right direction.”

John Lewis will also turn up its full-year results on Thursday.

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