Your browser is no longer supported. For the best experience of this website, please upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

Fate of BHS to be decided today

Creditors of troubled high street chain BHS will vote today on whether to accept its proposed company voluntary arrangement (CVA), which seeks rent reductions of up to 75% on a number of stores.

BHS

Earlier this morning, Allan Lockhart, property director of New River Retail, which owns 32 shopping centres, including The Ridings in Wakefield where BHS is a tenant, told Radio 4’s Today programme he would vote in favour of the CVA.

He said the rent from BHS represented a very small percentage of New River’s overall income and the inclusion of a break clause in the terms of the arrangement meant that, further along the line, if the tenant continued to underperform, it could be replaced.

However, last week Hermes Investment Management, which owns shopping centres in Tunbridge Wells and Milton Keynes, both of which are home to BHS stores, expressed concerns about the proposals. Meanwhile on Monday of this week, it was reported that BHS’s biggest creditor, the Pension Protection Fund, plans to abstain from the vote.

One BHS supplier told Drapers he felt obliged to support the CVA: “If we don’t support them, then they’ll go into administration. If we do then we’ll lose money. We have no option.”

BHS 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.

BHS has warned it will likely enter administration if it does not gain enough support for the plan. In this case, unsecured creditors could receive just 1.23p in the pound.

Keep an eye on drapersonline.com and @Drapers for updates on this story.

Related articles

BHS’s Darren Topp on CVA proposals

Timeline: A year in the life of BHS under Retail Acquisitions

Readers' comments (1)

  • No choice-agree it and possibly get something or don't and get basically nothing.
    Time to change the law so companies can't keep doing this.

    Unsuitable or offensive? Report this comment

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.