BHS in talks to stave off closure as Hartlepool among threatened stores

BHS, Middleton Grange Shopping Centre, Hartlepool
BHS, Middleton Grange Shopping Centre, Hartlepool

A flagship Hartlepool store is one of 40 threatened with closure unless rent levels can be reduced.

Struggling BHS has entered into a company voluntary arrangement as it battles to restructure its finances.

Middleton Grange shopping centre boss Mark Rycraft has been nominated in the Community category of the Hartlepool Mail Business Awards.

Middleton Grange shopping centre boss Mark Rycraft has been nominated in the Community category of the Hartlepool Mail Business Awards.

Accountancy firm KPMG is helping the store giants to hold talks with the landlords of the sites where BHS has outlets. The aim is to get rent levels down.

But the BHS branch in the Middleton Grange Shopping Centre in Hartlepool is one of 40 where a reduced rent of 25% would be paid for at least ten months.

If the plan is agreed, the branch could remain open, KPMG officials have indicated.

Middleton Grange Shopping Centre manager Mark Rycraft said: “We are obviously aware of the situation in light of today’s announcement by BHS Limited and BHS Properties Limited.

“We work closely with all of our retail partners and will continue to do so with BHS.”

KPMG’s Brian Green, one of the proposed supervisors of the CVAs, said: “The remaining 40 stores will continue to trade for a period of a minimum of 10 months whilst negotiations with landlords are undertaken to reduce the rents substantially.

“Where rent reductions are achieved, these stores will remain open. It is hoped that the store closure number will be kept to a minimum.”

Out of 164 BHS stores across the UK, the 77 most viable will be retained at current rents. At another 47, rent reductions of 75 or 50 per cent of their current levels are proposed.

Will Wright, also of KPMG and proposed ‘supervisor’ of the CVA, said BHS had been “one of the most iconic brands on the UK high street” for 90 years.

But profits had declined for reasons including changing customer behaviours and increased competition.

Mr Wright said the CVA proposals were “one facet of a wider turnaround plan” but they did tackle one of BHS’ largest fixed costs.

He added: “With the support of its lenders, shareholders and landlords, the company will be able to reshape its debt and operational structure to a model more suited to today’s multi-channel retail environment. The company needs to secure at least 75% creditor approval for these CVAs.”

Creditors will vote on the CVA on March 23.

Four years ago, the BHS Hartlepool branch opened and provided jobs for 50 people.