Scotland business

Scottish jobs at risk as BHS files for administration

BHS in Edinburgh Pic: John Easton
Image caption BHS has stores across Scotland, including Edinburgh

High street retailer BHS has filed for administration, putting hundreds of Scottish jobs at risk.

The move is expected to affect staff at 16 stores across Scotland. A total of 11,000 UK jobs are under threat.

In a statement, administrators Duff and Phelps confirmed that negotiations to find a buyer for the business had been unsuccessful.

If a buyer is not found it would be the biggest retail failure since the collapse of Woolworth's in 2008.

The administrators said that stores would continue to trade while they sought a buyer for the 88-year-old firm.

'No alternative'

Their statement added: "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.

"Further announcements will be made as appropriate in due course."

The company, which has debts of more than £1.3bn, decided to bring in administrators after talks to sell some of its 164 UK stores to Sports Direct collapsed over the weekend.

A pension fund deficit of £571m proved a major stumbling block in the last-ditch rescue talks.

BHS stores in Scotland

  • Sauchiehall Street, Glasgow
  • St Enoch Centre, Glasgow
  • Clydebank
  • East Kilbride
  • Hamilton
  • Kilmarnock
  • Falkirk
  • Stirling
  • Livingston
  • Ayr
  • Princes Street, Edinburgh
  • Leith
  • Cameron Toll, Edinburgh
  • Kirkcaldy
  • Dundee
  • Aberdeen

BHS owner Dominic Chappell said he will continue to work with the administrators to "find a solution post the administration".

He also said "no-one is to blame" for the collapse.

"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."

In a letter to staff, Mr Chappell said he was "sincerely sorry" and assured staff they would be paid their wages this month.

He added: "I would like to say it has been a real pleasure working with all of you on the BHS project, one I will never forget, you all need to keep your heads held high, you all have done a great job, but remember that it was always going to be very very hard to turn around."

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Shopworkers' trade union Usdaw said it was "devastating news" for the employees of BHS.

General secretary John Hannet urged the company to "change their attitude" to trade unions and to open dialogue with the union.

"We also urge the administrators and the company to comply with the law - consult with staff and Usdaw as the union for BHS workers," he said.

"We don't want to see BHS staff locked out of discussions, sent to the back of the queue of creditors and treated like fixtures and fittings, as happened at Woolworth's.

"The government needs to intervene now to protect taxpayers from picking up the bill for redundancy payments and safeguarding the Pension Protection Fund.

"We are in touch with our members working in BHS to reassure them that we will provide the support, advice and representation they require."

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Media captionWould shoppers miss BHS on the high street? The BBC finds out

Leigh Sparks, professor of retail studies at Stirling University, told BBC Radio Scotland's Good Morning Scotland programme that BHS had failed to keep up with its competitors since the turn of the century.

"A lot of retailers really came into the market around that time very successfully," he said.

"We have got department stores like John Lewis and Debenhams reinventing themselves and of course everyone went online.

"If you look at BHS in that market it never really changed that much and it never really managed, therefore, to keep a core customer business that was big enough to make it sustainable."

Last year, Retail Acquisitions, a consortium of financiers led by Mr Chappell, bought BHS from the retail entrepreneur Sir Philip Green for £1.

At the time, Retail Acquisitions said they would deliver £160m of funding to help turn around the fortunes of the chain, but have not been able to raise the sum.

BHS: A history of a High Street stalwart

Image copyright Getty Images
Image caption British Homes Stores first opened for business in Brixton, south London in 1928
  • 1928: A group of American entrepreneurs set up British Home Stores. The first store is in Brixton and nothing in the store costs more than a shilling (5p) - double that of rival Woolworth's maximum price of sixpence
  • 1929: BHS raises its maximum price to five shillings (25p) allowing it to sell home furnishings, including drapery
  • 1970: The firm expands steadily in the postwar era - by the beginning of the year it employs some 12,000 workers in 94 stores across the UK
  • 1985: BHS begins to franchise its brand to stores around the world, to which it supplies products and support
  • 1986: The store merges with designer Sir Terence Conran's Habitat and Mothercare to form Storehouse Plc, and the "British Home Stores" name is replaced with "BhS", then "Bhs" and eventually "BHS"
  • 2000: Retail billionaire Sir Philip Green buys BHS from Storehouse Plc for £200m
  • 2002: BHS becomes part of the Arcadia empire, controlled by Sir Philip, when he buys the clothing group and its Topshop, Dorothy Perkins and Burton brands
  • 2005: The store resurrects its "British Home Stores" branding, but it is losing ground to cheaper rivals like Primark
  • 2015: Sir Philip sells the loss-making BHS for £1 to Retail Acquisitions led by Dominic Chappell, writing off £215m of debts in the process
  • 2016: BHS begins an insolvency procedure to reduce its rents and transfer its pensions liabilities into the Pension Protection Fund, the government-supported rescue agency

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