Last week, retail mogul Sir Philip Green made the monumental decision to sell his underperforming BHS department store chain for only £1 to a consortium of little known financiers and lawyers operating under the name Retail Acquisitions. Now, it seems that the future of the chain lies in some doubt, with the new owners considering whether 52 of the brand’s branches should remain operational or should be sold on to other investors.
According to sources close to BHS, Retail Acquisitions has this week appointed property agents Jackson Criss and Charles Palmer Property in order to determine whether financial losses associated with the brand could be recovered through a mass sell-off of underperforming BHS stores. Many of the locations on the 52 strong list are key BHS branches, including those in Manchester, Birmingham and Leeds, and have already attracted the interest of other retailers keen to snap up prime positions on major high streets.
However, representatives of the consortium have been keen to stress that the shortlist at this point is no way set in stone, and that many of the stores appearing on the list may be downsized or remain operational rather than disappearing entirely. At present, the appointed property agents have only been instructed to seek buyers for five of BHS’s stores – those in Birmingham, Gloucester, Lakeside Thurrock, Cambridge, and at British Land’s Meadowhall Shopping Centre in Sheffield.
A Retail Acquisitions spokesman said; “As with any new owner, Retail Acquisitions, together with BHS management, is looking at options for the property portfolio and its structure.
“Property consultants have been appointed, but this does not mean that any leases that may be under review will be sold, and certainly does not mean that store closure is the only option – options could also include sub-letting underutilised space or renegotiating payment terms.
“BHS management has been clear, prior to the sale of the business, that certain loss-making stores might be sold at the right price, and in keeping with this the stores in Canterbury, Cardiff, Aylesbury, Bath and Thanet have been closed over the last 18 months.”
During the past financial year, BHS recorded a cash loss of £21 million, deepening the woes caused by a pension deficit of more than £100 million. Should a mass sale of store leases go ahead, this could raise up to £30 million – however, selling off around a third of the brand’s 171 store portfolio may be risky as consumer confidence continues to grow and retailers begin to enjoy conditions not seen since before the start of the financial crisis.
Upon signing the sale agreement with Sir Philip, Retail Acquisitions agreed that any proceeds from asset sales would be reinvested into the business as a means of ensuring BHS remains a going concern. However, with the fate of numerous stores now hanging in the balance, this is likely to be of little comfort to the 11,000 workers currently under the employ of BHS.
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