BHS to file for administration, putting 11,000 jobs at risk
Retailer BHS files for administration
(35 minutes later)
High Street retailer BHS is to file for administration on Monday, threatening almost 11,000 jobs.
High Street retailer British Home Stores (BHS) has filed for administration, putting 164 shops and almost 11,000 jobs at risk.
BHS representatives have told the BBC that it will go into administration.
The announcement came from administrators Duff & Phelps.
It comes after sources close to the company's owners admitted that "things don't look good".
They said BHS had "no alternative but to put the group into administration to protect it for all creditors".
Talks with Sports Direct to sell some of BHS's 164 stores collapsed over the weekend, and it is understood any buyer would do so only if it did not have to take on the £571m pension deficit.
The administrators will now try to find a buyer for all or part of the 88-year old business, but in the meantime BHS will continue to trade.
Business Live: BHS teeters on the brink
If a buyer does not come forward, it would be the biggest High Street collapse since Woolworths.
Pension scheme at heart of BHS woes
"The group has been undergoing restructuring and, as has been widely reported, the shareholders have been in negotiations to find a buyer for the business," administrators Philip Duffy and Benjamin Wiles said in a statement.
'Sincerely sorry'
"These negotiations have been unsuccessful," they said.
In a letter to staff, BHS owner Dominic Chappell said: "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."
BHS is "very unlikely to meet all contractual payments" as a result of its lower than expected cash balance, they said.
Mr Chappell said he was "sincerely sorry" and assured staff they would be paid their wages this month.
"The group will continue to trade as usual whilst the administrators seek to sell it as a going concern," they added.
He 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 all have done a great job, but remember that it was always going to be very very hard to turn around."
He suggested that Phil Duffy, a managing director at Duff & Phelps, had been appointed as administrator.
Last year, Retail Acquisitions, a consortium of financiers led by Mr Chappell, bought BHS from the retail entrepreneur Sir Philip Green for £1.
At the time, Retail Acquisitions said they would deliver £160m of funding to help turn around the fortunes of the chain, but have not been able to raise the sum.
Shopworkers' trade union Usdaw said it was "seeking urgent clarification from the company".
It also called on BHS to begin a dialogue "at this difficult and worrying time for staff".
'A bit dated'
Phil Dorrell, a retail analyst, told the BBC that going into administration "doesn't mean the stores close today, it means a buyer is sought".
The likelihood is BHS will be sold off "store by store" and "that probably means the name will disappear", said Mr Dorrell, managing partner at Retail Remedy.
"The problem is their trading offer is in the 1980s," he said. "Their stores look a bit dated. They are behind the times."
Last month, the brand was rescued from the brink after creditors voted to accept a cut in the rent bill for about half of its stores.
Analysis: Joe Lynam, BBC business correspondent
BHS simply didn't change - or at least didn't change fast enough - while retailers all around them did.
Britain has the most competitive and dynamic retail environment in the world, which attracts shoppers globally. Consumers here expect more, and they get more from nimble players such as Primark, Zara and M&S.
BHS could also have changed a decade ago - as online shopping came to the fore - but it missed that boat as well.
So, barring a last minute miracle, BHS will have new owners soon.
But in the worst case scenario it will go the same way as Woolworths and Comet and disappear from the High Street.
When the deal was approved, chief executive Darren Topp said he wanted the British public to give BHS a "second chance".
"We want to make it an iconic British brand again. We would like the British public to give us a second chance. Come and see our stores and you will be surprised," he said.
But despite the rent deal, BHS warned that it needed extra funding to continue trading.
It had been due to announce a new £60m loan last week, but failed to do so.
Separately, Retail Acquisitions had been hoping to raise £100m from property transactions.
They sold their Oxford Street lease in London for £30m but it was far less than they hoped for. And they also sold the lease on a Sunderland store to Sports Direct's Mike Ashley for £2m.
The retailer has debts of more than £1.3bn, including the pension fund deficit.
BHS denied speculation on Friday that it was on the brink of falling into administration. A spokesman said it was "business as usual" at the company and it was "on track" with talks over funding.
Sir Philip Green and Sports Direct could not be reached for comment.
BHS: A history of a High Street stalwart
Are you a BHS employee or customer? Let us know about your experiences. Email haveyoursay@bbc.co.uk with your stories.
Are you a BHS employee or customer? Let us know about your experiences. Email haveyoursay@bbc.co.uk with your stories.
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