BHS closes its doors for last time

By August 31, 2016Current Affairs
BHS | HR Solutions

After 88 years of being on the high street, BHS has finally closed its doors for the last time.

BHS announced it was going into liquidation back in April this year, putting which would lead to around 11,000 people losing their jobs and 22,000 pensions being put at risk.

It also saw previous owner Sir Philip Green facing a criminal investigation.

Retail tycoon Sir Philip Green, who bought the retailer in 2000, was described as the ‘unacceptable face of capitalism’ by MPs after he sold BHS to Dominic Chappell, who has a history of bankruptcy, for just £1 last year. Only 13 months before the retail chain collapsed.

Industry experts believe that a combination of years of poor investment and failure to react to strong competition led to BHS’s downfall.

Green bought BHS for £200m and in the early years it was a profitable business. However, despite putting £421m into the group to keep it afloat, he also took out £423m in dividends to give to members of his family and BHS shareholders, which left it with a pension deficit of £571 million.

Last year he sold the business to Dominic Chappell, a former racing driver with no retail experience.

Green has vowed to tackle the £600m pensions’ shortfall, but he could lose his knighthood if some MPS get their way.

If meetings between Green and the Pensions Regulator are not successful, then the 11,000 BHS workers who have lost their jobs are also likely to get a much smaller pension than expected.

BHS began in 1928 in south London as an affordable general. Its collapse has been the largest retail failure since Woolworths went into administration in 2008.

Retail Acquisitions, Chappell’s business which bought BHS, received at least £17m from BHS over the 13 months it owned the retailer.

In a bid to try to avoid a huge tax bill and to shield his money from the investigations into BHS’s failings, it is believed that Chappell is planning to put his own business into administration while restructuring his assets.

It is thought that Green is hoping to make a deal, to give cash lump sums to pension scheme members with less than £18,000 in savings to effectively buy them out. The rest could then move over to a new pension scheme, which would take off hundreds of millions of pounds off his bill.

The rest of Green’s Arcadia retail empire is also being investigated by the Pensions Regulator.

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