BHS has filed a company voluntary arrangement (CVA) today in an attempt to renegotiate rent deals on half of its 164 stores.
It said that 77 of its stores are unaffected, but it is seeking a “significant rent reduction” on a 40 stores in its portfolio and a “slight rent reduction” on the other 47 stores.
Up to 40 stores could close if landlords are unwilling to co-operate, although BHS said it hopes to keep store closure numbers to a minimum.
The department store chain said it is also looking to reset its cost base, including a head office restructuring and a consolidation of management levels in stores.
“The CVA proposal that we have announced today is a necessary milestone in resetting British Home Stores to ensure its long-term future as an iconic British retail brand,” said chief executive Darren Topp.
“Some of our stores are loss making as we are being charged rents that are too high relative to today’s market. The CVA will address this issue.”
The company said a successful CVA would allow it to make focus on making changes, such as renewing restaurants and cafes in stores, rolling out a convenience food offering to most stores and adding new signage, as well as in-store visual merchandising. It also plans to introduce “a fresh and enhanced” product range, and update its website.
It said the CVA proposal does not impact any supplier of goods or services to BHS.
Last month BHS secured a loan against its Cribbs Causeway store in Bristol in a continued bid to fund its turnaround plan. The loan comes from GB Europe Management Services, a European subsidiary of US firm Gordon Brothers.
The loan of around £10m will be used to fund its turnaround strategy, one aspect of which is to roll out BHS’s food business, which is performing better than expected.
In September, BHS secured a loan of around £65m from London-based investment group Grovepoint against a small number of its stores.
House of Fraser’s brand marketing director, Tony Holloway, joined BHS as marketing and creative director in January to work on new marketing initiatives set to launch in the second half of the year, one of which will be focused on fashion.