Hermes Investment Management, a landlord of two BHS stores, has expressed concerns about the terms of the retailer’s proposed company voluntary arrangement (CVA).
BHS wants landlords of 40 loss-making stores to slash rents by 75%, and is seeking a 20% or 50% reduction on another 47 units. The retailer has 164 stores in total.
Hermes owns shopping centres in Tunbridge Wells and Milton Keynes, both of which are home to BHS stores. Chris Taylor, chief executive of Hermes Real Estate and head of private markets, told The Daily Telegraph CVAs should be “approached with caution”.
“They have the potential to create unfair competition on the high street by prejudicing some retailers at the expense of others and compromising the position of landlords. We want to reach a solution that is fair for all our tenants and do not believe BHS’s CVA proposal will achieve that.”
A BHS spokesman told the newspaper: “We understand their position. Hermes were negotiating with us last week to take back the Milton Keynes store and their offer remains open. They have offered a substantial sum of money for the site, so you can understand why they would vote against the CVA.”
He said BHS was “confident of the CVA succeeding”, and that the retailer is having “constructive” discussions with many of its landlords and other creditors.
He added: “We continue to believe that the CVA is in the best interests of BHS.”
A creditors’ meeting will be held on March 23. Three-quarters must agree if the proposals are to pass.