BHS has hired financial services firm KPMG to help cut its rent bill on more than 30 “problem” stores as part of its turnaround plan.
KPMG has been drafted in to help negotiate with landlords in a bid to reset rents to “more realistic rates”, a spokesman for BHS told Drapers.
Some BHS stores have historic contracts where rents are more than twice the market value, he explained. The retailer wants to put its stores on a level playing field with local competition.
Chief executive Darren Topp previously told Drapers he had identified around 30 stores he needed to “sort out in some way or another”. He added: “That could mean we cut some in half, do something different. Closure would be the last option.”
BHS had 173 UK stores when it was sold by Arcadia boss Sir Philip Green for £1 in March 2015. It has closed six since the transaction, while in January it leased part of its Oxford Street flagship to Polish retailer LLP.
It has been suggested that one option under consideration is a company voluntary arrangement (CVA), which would ask landlords to vote on an offer of reduced rents. The BHS spokesman denied this.
However, one property agent said: “They have approached a few landlords suggesting that if they won’t take their store back then they will proceed with a CVA, but we’ve not yet seen any evidence of this.”
Last September, BHS secured a £65m loan from investment group Grovepoint Capital.
Financial services firm Grant Thornton is putting together a proposal to reduce the retailer’s pension scheme, which is thought to be in deficit to the tune of around £207m.