Sunderland's BHS store to close after bid to find a buyer for national chain fails
Sunderland's BHS store looks doomed after efforts to sell the High Street chain failed.
But the man charged with making Sunderland city centre attractive to shoppers says he is still optimistic about the future of the High Street.
Up to 11,000 jobs nationwide are under threat with the collapse of BHS - with administrators unable to find a buyer, the business will be wound down and all 163 shops nationwide will close.
Administrator Duff & Phelps says 8,000 permanent posts are likely to be lost and the jobs of another 3,000 people not directly employed by BHS are also at risk.
Sunderland Business Improvement District chief executive Ken Dunbar said closure of the High Street West store was a blow, but he was still confident about the loing-term future for Britain’s town and city centres.
“It is a national disaster, not a Sunderland disaster, that a great national business has gone under,” he said.
“It’s a great shame for their history, their heritage and, of course, the staff who are going to lose their jobs.”
The rise of on-line shopping had been the undoing of many traditional shops, but a new generation of retailers was coming through which had adapted their business model to the 21st Century.
“The optimistic point I would make is that we are already seeing see businesses moving into city and town centres who have really examined what it is they need to do to attract customers,” said Ken.
“I am very optimistic about the new approach these companies are taking and over the next three or four years, I think we will see big changes.
“Our strategy is about creating an experience for customers and that is what everybody has to do.”
The liquidation of BHS comes after last-ditch rescue bids from former Mothercare boss Greg Tufnell and Mike Ashley’s Sports Direct failed.
A Duff & Phelps statement said: “Although multiple offers were received, none were able to complete a deal due to the working capital required to secure the future of the company.”
The administrator added that BHS would be in “close-down sale mode” over the coming weeks as it proceeds an “orderly wind-down” of the business.
Managing director Philip Duffy said: “The British high street is changing and, in these turbulent times for retailers, BHS has fallen as another victim of the seismic shifts we are seeing.
“The tireless work and goodwill of the existing management team and employees of BHS with the support of my team were not enough to change the fortunes of the company.”
BHS collapsed into administration in April, leaving behind a £571million pensions black hole and sparking an investigation by MPs into its demise.
Attention will now turn to the role of previous owners, billionaire Sir Philip Green and former bankrupt Dominic Chappell, in the firm’s collapse.
MPs are set to quiz both men in the coming weeks.
The pair have been roundly criticised, Sir Philip for paying a £400 million dividend to his family from the business and over his management of the pension scheme, and Mr Chappell for sucking management fees out of BHS before its collapse.
Shopworkers’ trade union Usdaw urged administrators to look after the best interests of staff.
National officer Dave Gill said: “This news is a devastating blow for the staff and the shock waves will be felt on high streets throughout the country. There are some very serious questions that need to be answered, by former owners of the business, about how a company with decades of history and experience in retail has now come to this very sorry end.
“We believe the Government has also got to take a hard look at the process of administration. Currently the law requires administrators to liquidate a company if they believe that secures the best return for creditors, regardless of whether there is an option to keep the business going and secure jobs.
“Now that decision has been made for BHS, we urge the administrators to comply with the law on consultation and not force the staff to seek a protective award which can result in taxpayers picking up the bill.
“There are wider concerns the Government needs to address about the future of the high street as we see yet another major player go to the wall. Very real concerns need addressing about the impact of business rates, high property rents and the much higher tax liabilities high street retailers they have over online retailers.
“In the meantime we are providing the support and advice our members in BHS require at this very difficult time.”