BHS threatens to close 40 stores

Department store chain BHS says 40 of its 164 stores may close unless landlords "reduce the rents substantially" on half its stores.

Loss-making BHS was sold last year for a £1 by Top Shop boss Sir Philip Green, although the deal was more complicated than the sum may imply.

The buyers were Retail Acquisition, a low-profile group of investors.

It believes it is paying well over market rates for around a quarter of its stores.

BHS is trying to secure a Company Voluntary Arrangement (CVA) in order to turn the business around.

In order to gain this, it needs to have the approval of 75% of its landlords.

'Milestone'

The stores facing closure have not been identified and the company says they will stay open until the end of the year while negotiations are underway.

"It is hoped that the store closure number will be kept to a minimum," it said in a statement.

Chief executive Darren Topp said the move was necessary for the turnaround plan.

"The CVA proposal that we have announced today is a necessary milestone in resetting British Home Stores to ensure its long term future as an iconic British retail brand."