BHS chief executive Darren Topp has pleaded with suppliers and landlords to support the firm’s proposed company voluntary arrangement (CVA) ahead of the creditors’ vote next week.
Darren Topp, BHS
The retailer has submitted proposals to the High Court that ask landlords of 40 loss-making stores to cut rents by 75%. It is seeking a 20% or 50% reduction on a further 47 units. BHS has 164 stores in total. The terms of the CVA drawn up by BHS’s adviser, KPMG, require the approval of 75% of BHS creditors, some of whom have voiced concerns about the proposals.
“I would say to all of our creditors we need your support next Wednesday,” said Topp.
“We have been working hard with landlords but we’ve not managed to get the traction required to get costs down to where the market is. I’m not blaming landlords for not wanting to reduce rents but the world has moved on.”
Speaking at Retail Week Live Topp said some BHS leases run into the next century and would be “a problem for decades to come”.
“The CVA we’re proposing will give us the right-sized cost base on properties. It is critical to the survival and growth of BHS,” he added.
The boss of the troubled department store chain said BHS, like all retailers, had a responsibility to make high streets across the UK “vibrant and interesting”.
“Over the last six years the cost of rates on the high street have gone up 20% and the costs of operating stores have gone up in double digits, while sales from shops have flatlined. Any growth has come from online. It’s not sustainable.”
He continued: “The government has to do something but we all have a part to play individually and collectively to make our high streets vibrant, and somewhere people want to visit. We need them to be clean and safe with easy parking. Retailers, landlords and the government need to work together to rebuild the high street.”