BHS has secured its short-term future after creditors voted in favour of its company voluntary arrangement (CVA) for BHS Ltd, one of two companies within the group that comprises 125 of its stores.
Darren Topp, BHS
Speaking to Drapers just before the second vote for BHS Properties, which represents the remaining 23 stores, chief executive Darren Topp was thankful but pragmatic about the work that still needs to be done.
“We are very grateful and appreciative to our creditors who have supported us through the process and we realise for landlords in particular, it hasn’t been an easy decision,” he said.
“But we have to remember that this is just the start of the process. There is lots to do and we’re not afraid of it. We have a great team behind us and we’ll be accelerating our turnaround plan.
”One important part will be convincing the great British public to give us another chance – telling them to come back into stores to see some of the work we have been doing.”
Another crucial part of the recovery plan involves raising £100m of new funding to invest in its stores, online and in its overall proposition.
Topp said BHS is in the final stages of agreeing property transactions that will bring in £30m. These are set to be confirmed over the next couple of days and are thought to include a combination of sales and “sale and leasebacks” on stores including the Oxford Street flagship.
The company has had final credit approval for asset-based lending totalling £60m from Gordon Brothers.
BHS said it intends to raise the remaining £10m by withdrawing letters of credit, which it has been using to place orders with suppliers since its credit insurance was suspended last year.
“We are in discussion with suppliers on a case-by-case basis about this, but really, for a company in the situation we’re in, we can’t be writing letters of credit,” said Topp.
“Today’s decision is part of a series of actions we are taking and, of course, we’re really pleased with the result, but tomorrow morning the work starts in earnest. It’s a good foundation on which to build.”
The result of the second creditors’ vote on BHS Properties will be announced later today.