Company representatives have reportedly told the BBC that the retailer will file for administration today.
Talks with Sports Direct to sell some of BHS’s 164 stores allegedly collapsed over the weekend, and it is understood any buyer would only go ahead if it did not have to take on the £571m pension deficit. In a letter sent to staff, BHS owner Dominic Chappell is reported to have 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.” Mr Chappell said he was sincerely sorry and assured staff they would be paid their wages this month. 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 hard to turn around.”
The letter is reputed to confirm 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 it would deliver £160m of funding to help turn around the fortunes of the chain, but the company has not been able to raise the necessary sum. 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. It sold the Oxford Street lease for £30m but it was far less than it had hoped for. It 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.