11,000 jobs at risk as BHS goes into administration - stores in Ipswich, Lowestoft and Chelmsford
High street retailer BHS has collapsed into administration, threatening the closure of up to 164 stores, including one in Ipswich’s Buttermarket.
It is the biggest retail failure since Woolworths went bust in 2008.
In a statement, administrators Duff & Phelps said: “The group (BHS) has been undergoing restructuring and, as has been widely reported, the shareholders have been in negotiations to find a buyer for the business. These negotiations have been unsuccessful.
“In addition property sales have not materialised as expected in both number and value. Consequently, as a result of a lower-than-expected cash balance, the group is very unlikely to meet all contractual payments.
“The directors therefore have no alternative but to put the group into administration to protect it for all creditors. The group will continue to trade as usual whilst the administrators seek to sell it as a going concern.”
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The company’s owner, Dominic Chappell, said he will continue to work with the administrators to “find a solution post the administration”.
He also said “no-one is to blame” for the collapse.
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“No-one is to blame. It was a combination of bad trading and not being able to raise enough money from the property portfolio.
“In the end, we just couldn’t reach an agreement with Arcadia over pensions.”
BHS was bought last year by a consortium called Retail Acquisitions, headed by Mr Chappell, for £1 from retail entrepreneur Sir Philip Green, the owner of the Arcadia retail empire.
BHS has debts of more than £1.3billion, including a pension fund deficit of £571 million, which proved a major stumbling block in last-ditch rescue talks over the weekend.
Rival retailer Sports Direct is understood to want to some of BHS’s 164 stores, but will only do so if it does not have to take on any pension liabilities.
Sir Philip is reported to have offered £80million towards the cost of BHS pensions, though the regulator could still pursue further payment from the retail billionaire.
Sir Philip bought BHS for £200m in 2000.
Customers shocked at business’ plight
Several Ipswich shoppers visiting BHS expressed their surprise and disappointment at the news of the company’s administration.
A steady flow of people were using the store around lunch time on April 25 as members of staff started to put up notices about the plight in the windows.
Sheila Lakkides felt the company didn’t seem to have done anything wrong.
“I’m shocked,” she said. “I think it will be a big loss to the town.
“I’m a regular customer. As far as I am concerned they were doing everything OK.”
Chantelle Foster said: “If it was replaced by something equally as nice it wouldn’t be as big a hit (to the town).
“They say it hasn’t really moved with the times, but it’s actually really nice.
“I would be sad if it closed,” she added.
Marilyn Manning said she feared for the health of Ipswich’s town centre if its BHS branch had to close.
“I’m a regular visitor and I think it’s a real shame,” she said.
“It’s another shop closing, Ipswich will soon become a ghost town.
“These sort of stores they are never able to replace.”
Susan Foster said she used the store both for its clothing range and its cafe.
“I think it would be a loss if it closed. This is where we come regularly for a coffee. I buy quite a few clothes from here. There are other shops, but for women of a certain age there’s not an awful lot of shops you can get clothes from.”