BHS corporate recovery begins following final stores’ closure

Published on September 15, 2016 by Crawfords Accounting

The notion of ‘corporate recovery’ might seem out of the question in relation to the BHS brand, following the closure of the final high street stores in the chain on August 28th.

After 88 years as a high street stalwart, the brand – formerly British Home Stores – closed its doors for the last time at the 22 remaining branches on the Sunday.

However, that does not mean the end for the household name of BHS, and although full corporate recovery was not possible, with nobody willing to buy it as a going concern, the brand name will survive at least for now.

A statement on the now-closed BHS website explains: “BHS Online, and the International business, have been purchased by new investors and will operate under the new trading company BHS International Ltd.

“BHS will return online soon, with a great new website and all the products you love, along with stylish new ranges perfect for your home and wardrobe.”

The notice is an indication of how corporate recovery might not always mean saving bricks-and-mortar stores, but can instead be about finding a buyer for brand assets, if that is the most suitable solution to a business administration scenario.

Figures from the Centre for Retail Research rank the collapse of BHS as the second-biggest retail failure since 2007, with only Woolworths affecting more employees and stores.

Woolworths stands head and shoulders above the other retail failures since the recession began, with 820 branches closed and 30,000 jobs lost.

BHS takes the second place with 164 stores and 11,000 staff, having run up a pension fund deficit of £571 million over the past 15 years, from a £5 million surplus in 2001.

The analyst’s Who’s Gone Bust? report cites a total of 18 significant retail failures in 2016 to August, affecting just over 1,200 stores and around 23,500 employees.

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