BHS to file for administrationpublished at 08:15 British Summer Time 25 April 2016Breaking
BBC Radio 5 Live
Representatives of BHS have told BBC 5 live Breakfast that the retailer will go into administration today.
BHS retailer files for administration
Almost 11,000 jobs under threat
Retailer's 164 UK stores will continue to trade
Pensions Regulator to investigate
Collapse is the biggest retail failure since the fall of Woolworths in 2009
Russell Hotten
BBC Radio 5 Live
Representatives of BHS have told BBC 5 live Breakfast that the retailer will go into administration today.
Today Programme
BBC Radio 4
Nick Hood, business risk adviser at the insolvency practice Opus, tells Today the options for BHS are “distinctly limited”.
He says the business was losing money for a long time and was “seriously under-invested in” over the same period. It lost £416m in the six and a half years before Sir Phillip Green’s Arcardia Group sold it for £1.
“In retail these days it’s all about heavy investment in staying up with the trend, online offering, mobile offerings and none of this has happened at BHS,” he says. “This has awful echoes of… the demise of Woolworths. Another retail business that hasn’t stayed up with the times.”
John Hannett, general secretary of the shopworkers' union Usdaw, says the apparent demise of BHS is "devastating" for staff.
"The uncertainty is really difficult for people, who today are waking up to the news, watching the news reports, listening to me, listening to others and thinking 'what does it mean for me?' And I think what we want is a constructive dialogue, about what are the remedies, what are the options, is there potential buyers? Most importantly remember this is about people it's not just about economics."
Not that much going on in the business world this morning apart from the imminent demise of BHS, but Philips has said it plans to spin off its successful lighting division - which would be the world's largest lighting maker.
"With equity markets' sentiment improving compared to the first couple of months of the year, an IPO increasingly appears a more likely outcome," the Dutch company said. "Philips expects to update the market on conclusions and next steps shortly."
Philips also reported better than expected first quarter profits of €290m as like-for-like sales rose 3%.
Today Programme
BBC Radio 4
Unless Sir Phillip Green can come up with a figure “which is acceptable to the Pensions Regulator, then this whole process will take years and years and years to work its way through the courts”, John Ralfe also tells Today.
It is believed that Sir Phillip has offered to pay £80m, "but that’s against debts of £571m," Mr Ralfe says. “That simply doesn’t touch the sides.”
Today Programme
BBC Radio 4
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The Mirror quotes a letter, external that BHS boss Dominic Chappell has sent to the retailer's near-11,000 workers: “It is with a deep heart that I have to report, despite a massive effort from the team, we have been unable to secure a funder or a trade sale. We as directors have called for administration tomorrow.”
Mr Chappell 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 have done a great job and remember it was always going to be very, very hard to turn around.”
The statement said wages would be paid this month.
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Today Programme
BBC Radio 4
More from John Ralfe, who says the BHS pension scheme has about 20,000 members.
“Those people who haven’t yet retired will see an immediate reduction in their pension of 10%,” he says. "For those people, and those who have already retired, the rules of the Pensions Protection Fund compensation mean that annual inflation protection isn’t very generous. So for some people - particularly the older pensioners - they won’t see any increase in their compensation however long they live."
Members of the pension scheme become unsecured creditors for the purposes of paying off debts, Mr Ralfe says, which means they come after secured creditors in terms of priority. And once those creditors have been paid off there’s usually "very little left”, he adds.
Today Programme
BBC Radio 4
BHS is in a lot of debt, about £1.3bn worth of debt to be precise, of which £571m is pension debt.
So will Sir Phillip Green (pictured), who sold BHS for £1 last year, find himself liable for some of that debt? Pensions expert John Ralfe tells Today “it isn’t a question of with one bound he is free” regarding the pensions liabilities of BHS and Sir Phillip’s relationship with the company.
Quote MessagePensions regulations are set up to prevent companies dumping their pensions liabilities. Now I’m not suggesting that’s what Sir Phillip did, but there is certainly a prima facie case to be answered and I’m very clear based on what the pensions regulator has done in the past that the regulator will be prepared to spend a lot of time and effort and money taking a claim through the courts simply because the amount that we are talking about - £571m - is a huge amount."
John Ralfe, Pensions consultant
BBC Radio 5 Live
George MacDonald, executive editor of Retail Week, tells Wake Up To Money that he expects an announcement from BHS by late morning: "Pretty much as soon as office hours begin they will start telling the staff."
Once in administration, BHS is more likely to disappear from the high street than find a last-minute white knight, he says.
There is still value in some of BHS's leaseholds, such as its flagship store on Oxford Street, Mr MacDonald says, but the "actual brand has struggled for some time. It would be a brave person who made yet another attempt."
Today Programme
BBC Radio 4
George MacDonald, executive editor of Retail Week which broke the story of BHS's imminent collapse on Friday, tells Today that the chain BHS would have like to have "pulled a rabbit out of the hat over the weekend" - but hasn’t been able to.
BHS, which agreed a deal with its creditors to keep afloat only last month, was hoping to raise £60m to restructure but was not successful, he adds.
An announcement on the future of the department store founded in 1928 will be made later this morning, Mr MacDonald says.
Tough talk from the Sun's deputy political editor (and former Times retail correspondent) Steve Hawkes on the fate of BHS:
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Today Programme
BBC Radio 4
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It's only been a month since High Street retailer BHS agreed a deal to cut the rent at around half its stores with its creditors to keep it out of administration but it looks as if the deal wasn't enough.
It means 11,000 jobs are once again under threat.
Sources close to the owners have told the BBC that "things don't look good".
A spokesman said a statement was expected "about BHS's future", but refused to give more details.
Talks are continuing with Sports Direct to buy some of BHS's 164 stores, but it is understood any buyer would do so only if it did not have to take on its £571m pension deficit.
Last year, BHS was sold by the entrepreneur Sir Philip Green for £1.
He had bought it for £200m in 2000.
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Chris Johnston
Business reporter
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