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Albert Bridge
BHS network, numbered 164 department store, in April passed under temporary management of consulting firm Duff & Phelps because of debts. Currently, the company is being wound up, more than 11 thousand employees were dismissed.
Potential buyers were scared off by a "hole" of 571 million pounds in the retailer’s pension fund. Pensions of 20 thousand employees are threatened with cuts and nonpayment. Amount of net debt is estimated at 1.3 billion pounds. The bankruptcy is explained by actions of Philip Green, a former owner of BHS.
As reported by BBC, people hoping for a significant discount lined up in front of last BHS stores on Sunday. Many of the shelves were empty, and customers actively bought up the remaining goods.
"It is sad to talk with shop assistants and customer service employees, who remained out of work. However, I cannot say that I came here often, the shop was too expensive. Frankly, for buyers, all this means just a change of signs on the store "- the channel quoted one of the buyers.
Earlier, Committee on Labor and Pensions of the British Parliament, and the Committee of the Business and Innovation published a joint report on the company’s bankruptcy proceedings. According to them, the "king of retail," namely, Green, allowed financial improprieties for personal gain and for his family, which led to the company's pension fund deficit.
Knowing reality of the situation, according to parliamentarians, Green decided to sell the company quickly. As a result, BHS was sold in 2015 for a nominal £ 1 to Retail Acquisitions consortium. According to deputies, the chain’s ex-owner systematically withdrew "millions of pounds" from the BHS, which was called "unacceptable". Green in 2006 was awarded knighthood for his merits in retail trade. Now, public puts his title under question due to detected violations of corporate behavior.
When Green bought British Home Stores in 2000, the 72 years old company suffered serious financial difficulties. According to Guardian, the new owner insisted that he could turn the business into a foundation for a new retail empire. At first, everything was going well. After rebranding and reorganization, the company's net profit for the year doubled [by Bloomberg data], and surplus of the pension fund grew from £ 5 million in 2000 to £ 17 million in 2001 [Guardian].
However in March last year, Green sold BHS for only £ 1 to Retail Acquisitions. Its owner, British businessman Dominic Chappell, had no experience in retail, and went bankrupt three times. In less than a year, the company went bankrupt too.
At the end of April 2016 BHS came under control of an interim administration. The temporary managers immediately started negotiations with potential buyers for salvation of the company, but failed to find a buyer. Eventually, they had to announce the company's liquidation.
11 thousand employees found themselves on the verge of dismissal. According to the Guardian, total size of BHS debt as of April 2016 was £ 1,3 bln. Over 16 years of management, the company’s amount of pension fund went from £ 17 million in 2001 to minus £ 571 million in April 2016.
Pressure on Green intensified after it became known that BHS’s collapse cost taxpayers £ 36 million and that Tina Greene made a profit of £ 53 million from the sale of the company's headquarters Arcadia. The Guardian says that during Green’s management, he and other investors have accumulated a total of more than £ 580 million in the form of dividends, rent and interest.
Members of Parliament demand that Green contributes a large sum to the company’s pension system. Member of Parliament from the Labour Party Jim McMahon even asked Cameron to consider question of depriving Sir Green of his title. Meanwhile, Daily Mail wrote that Tina Green, in turn, risks losing Monaco resident status due to the scandals associated with Arcadia management.
June 15, Green appeared before the parliamentary committee on business and management of pension funds, which is investigating the case of BHS’s bankruptcy. During the six-hour hearing, he stated that "his conscience is clear," and said he did not suspect that Dominic Chappell could "destruct the largest retailer." After the hearing, Green apologized to BHS’s staff, admitting that he had sold his business to "the wrong guy."
source: bbc.com, theguardian.co.uk
Potential buyers were scared off by a "hole" of 571 million pounds in the retailer’s pension fund. Pensions of 20 thousand employees are threatened with cuts and nonpayment. Amount of net debt is estimated at 1.3 billion pounds. The bankruptcy is explained by actions of Philip Green, a former owner of BHS.
As reported by BBC, people hoping for a significant discount lined up in front of last BHS stores on Sunday. Many of the shelves were empty, and customers actively bought up the remaining goods.
"It is sad to talk with shop assistants and customer service employees, who remained out of work. However, I cannot say that I came here often, the shop was too expensive. Frankly, for buyers, all this means just a change of signs on the store "- the channel quoted one of the buyers.
Earlier, Committee on Labor and Pensions of the British Parliament, and the Committee of the Business and Innovation published a joint report on the company’s bankruptcy proceedings. According to them, the "king of retail," namely, Green, allowed financial improprieties for personal gain and for his family, which led to the company's pension fund deficit.
Knowing reality of the situation, according to parliamentarians, Green decided to sell the company quickly. As a result, BHS was sold in 2015 for a nominal £ 1 to Retail Acquisitions consortium. According to deputies, the chain’s ex-owner systematically withdrew "millions of pounds" from the BHS, which was called "unacceptable". Green in 2006 was awarded knighthood for his merits in retail trade. Now, public puts his title under question due to detected violations of corporate behavior.
When Green bought British Home Stores in 2000, the 72 years old company suffered serious financial difficulties. According to Guardian, the new owner insisted that he could turn the business into a foundation for a new retail empire. At first, everything was going well. After rebranding and reorganization, the company's net profit for the year doubled [by Bloomberg data], and surplus of the pension fund grew from £ 5 million in 2000 to £ 17 million in 2001 [Guardian].
However in March last year, Green sold BHS for only £ 1 to Retail Acquisitions. Its owner, British businessman Dominic Chappell, had no experience in retail, and went bankrupt three times. In less than a year, the company went bankrupt too.
At the end of April 2016 BHS came under control of an interim administration. The temporary managers immediately started negotiations with potential buyers for salvation of the company, but failed to find a buyer. Eventually, they had to announce the company's liquidation.
11 thousand employees found themselves on the verge of dismissal. According to the Guardian, total size of BHS debt as of April 2016 was £ 1,3 bln. Over 16 years of management, the company’s amount of pension fund went from £ 17 million in 2001 to minus £ 571 million in April 2016.
Pressure on Green intensified after it became known that BHS’s collapse cost taxpayers £ 36 million and that Tina Greene made a profit of £ 53 million from the sale of the company's headquarters Arcadia. The Guardian says that during Green’s management, he and other investors have accumulated a total of more than £ 580 million in the form of dividends, rent and interest.
Members of Parliament demand that Green contributes a large sum to the company’s pension system. Member of Parliament from the Labour Party Jim McMahon even asked Cameron to consider question of depriving Sir Green of his title. Meanwhile, Daily Mail wrote that Tina Green, in turn, risks losing Monaco resident status due to the scandals associated with Arcadia management.
June 15, Green appeared before the parliamentary committee on business and management of pension funds, which is investigating the case of BHS’s bankruptcy. During the six-hour hearing, he stated that "his conscience is clear," and said he did not suspect that Dominic Chappell could "destruct the largest retailer." After the hearing, Green apologized to BHS’s staff, admitting that he had sold his business to "the wrong guy."
source: bbc.com, theguardian.co.uk
