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Sir Philip Green 'saddened' as BHS disappears from high street

Published 02/06/2016

BHS collapsed into administration in April, putting 11,000 jobs at risk
BHS collapsed into administration in April, putting 11,000 jobs at risk

Former BHS owner Sir Philip Green has said he is "saddened and disappointed" on learning that the retailer is to disappear from the high street, resulting in the loss of up to 11,000 jobs, after administrators failed to find a buyer.

A spokesman for the billionaire Topshop owner added that he had hoped to see the department store chain sold as a going concern.

Sir Philip's remarks come after administrator Duff & Phelps announced t he business will be wound down and all BHS's 163 shops closed and sold off to other retailers. Duff & Phelps added that 8,000 permanent jobs are likely to be lost and another 3,000 not directly employed by BHS are also at risk.

Hopes had been raised that last-ditch bids from former Mothercare boss Greg Tufnell and Mike Ashley's Sports Direct could rescue the stricken retailer, but they ultimately fell short.

Duff & Phelps said: "Although multiple offers were received, none were able to complete a deal due to the working capital required to secure the future of the company."

The administrator added that BHS will be in "close-down sale mode" over the coming weeks as it proceeds an "orderly wind-down" of the business.

Philip Duffy, managing director of Duff & Phelps, 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."

Restructuring firm Hilco will now be tasked with helping liquidate BHS's store estate and remaining stock.

Staff at one branch were only informed of the decision by a journalist.

One worker, who asked to remain anonymous, said: "The managers told us nothing, they're just sitting in the office."

Moments later, customers were asked to leave the store and the shutters closed.

BHS fell into administration in April, leaving behind a £571 million pensions black hole and sparking an investigation by MPs into its demise.

Attention will now turn to the role of Sir Philip, who owned the chain for 15 years, and the man he sold it to for £1 last year, former bankrupt Dominic Chappell.

MPs are set to quiz both men in the coming weeks over their roles in the retailer's collapse.

The pair have been roundly criticised: Sir Philip for paying a £400 million dividend to his family from the business and over his management of the pension scheme, and Mr Chappell for sucking management fees out of BHS before its collapse.

As a secured creditor to BHS, Sir Philip's Arcadia also stands to pocket up to £35 million from the wind-down, depending on how much Hilco can glean from the property and stock.

Business Minister Anna Soubry said: "The Business Secretary has already announced an accelerated Insolvency Service investigation into the activity of former BHS directors. Any issues of misconduct will be taken extremely seriously."

The news comes just days after administrators to Austin Reed said 120 stores would close after also failing to find a buyer for the business, resulting in the loss of approximately 1,000 jobs.

Richard Lim, chief executive of Retail Economics, described BHS's collapse as a "devastating blow to the UK high street".

He added: "This once iconic British retailer suffered from paralysis when it came to innovation and it failed to stem the loss of market share to other more agile multi-channel competitors.

"The business model was simply no longer fit for purpose and its product range failed to resonate with its core customer base. Following the collapse of Austin Reed, these recent events focus the mind on how many other traditional UK retailers are sleep-walking into administration."

However it was business as usual at some other BHS stores.

In the branch in Manchester City Centre, believed to employ around 250 workers, staff continued as normal, with customers being told it would be "weeks" before they knew if their store was closing for definite and their jobs lost.

A member of staff said he believed some stores may find buyers but it would be "three weeks" before employees would find out which ones.

The BHS branch at the Trafford Centre, outside Manchester, likewise remains open for business.

One member of staff said: "I'm really stressed about it all. I will just have to try to get another job."

How is Northern Ireland affected?

There are around 200 employees and four stores in Belfast's Castle Lane, at Holywood Exchange, Newtownabbey's Abbey Centre and Lisburn's Bow Street Mall.

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