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Property sector downplays BHS Oxford Street rumours

Polish fashion retailer Reserved is unlikely to sublet the front of BHS’s Oxford Street flagship, sources have told Drapers.

It comes after reports emerged this week that Reserved and Swedish furniture firm Ikea are in talks with the struggling chain to sublet the unit at 252-258 Oxford Street.

Property sources insisted that, while Reserved is actively looking for its debut UK store in London, it is unlikely to choose the BHS unit.

“Reserved is definitely looking at the UK, but they are not looking at that property,” said one agent, while another source close to the situation said there was “no truth whatsoever” to the rumour. 

Another agent said: “Reserved is looking at a lot of properties and it bid aggressively for the lease on 425 Oxford Street, which was won by Adidas.

“The company is keen to move into the UK, but in this instance with BHS it is more likely that it is only a pawn in a bigger game to drum up interest.”

Reserved is owned by Polish conglomerate LPP, whose portfolio also includes fashion brands Cropp, House, Mohito and Sinsay.

It is LPP’s largest brand and comprises menswear, womenswear and kidswear, with prices ranging from £5 for a T-shirt to £60 for a parka.

LPP, which has 1,400 shops worldwide and an annual turnover in excess of £700m, has previously said it is planning to open flagship stores in other European cities, including Paris, Milan and London, over the next four years.

However, one property source suggested the Reserved and Ikea reports could be part of an attempt by BHS to bring the building’s freehold owner Lancer Property Asset Management to the negotiating table. He said this would be the best-case scenario for BHS.

“They are releasing information about who is interested as Lancer will lose control of the space if BHS sublets. It’s not that they aren’t having conversations with other people and that others won’t be interested, but BHS’s primary focus is to make the most money by selling to Lancer.”

A source close to the situation said that BHS is continuing to explore talks in order to boost its cash flow. “BHS has a balance sheet that has value on it and the turnaround needs cash, so the quicker it gets that the better. It will use those assets as a lending base.”

Drapers understands that advisory, restructuring and investment firm Gordon Brothers recently analysed BHS’s stock file and confirmed it has a lot of value it could borrow against.

A source said that, although clothing sales have been hampered by the mild weather in recent weeks, gifting is performing well and the retailer is gearing up for promotions surrounding Black Friday.

Arcadia’s Sir Philip Green sold BHS to little-known financiers Retail Acquisitions in March for £1.

Reserved did not respond to Drapers’ request for a comment.

 

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