2 Jun 2016: BHS to be liquidated
BHS’s administrators have confirmed that a buyer for the group could not be found.  This brings a sad end to the much-publicised difficulties of the 163 store group with responsibility for its £600m pension scheme likely to fall on the PPF.

The BHS scheme entered a PPF assessment period in March this year following the retailer’s company voluntary arrangement (a qualifying insolvency event).  It was hoped that a rescue deal would emerge to keep BHS afloat and potentially keep the scheme out of the PPF.  While the BHS group is now being wound down, it leaves behind two parliamentary inquiries, an Insolvency Service investigation into the current and former BHS Directors and a TPR anti-avoidance investigation.

BHS had been loss-making for a number of years driven by a changing UK retail environment with increased competition from the internet and popular budget high street brands.  The catalyst for attention however was the sale of the group for £1 in 2015 by the then owner Sir Philip Green to an entity called Retail Acquisitions Ltd.  This followed substantial dividend payments in earlier years.

According to press reports, TPR was first in discussions with BHS in 2009 about its deficit.  However it opened an anti-avoidance investigation following the 2015 sale to determine whether the previous owners should be pursued to make up the shortfall.

Argyll comment:  Another failure of a well-known UK high street retailer following Austin Reed’s entry into administration in April.  The PPF had been working with BHS management to find a solution to keep the scheme out of the PPF.  In accordance with its current practice this could have entailed a 33% stake in the business.  Whether additional value can be secured for the scheme will now depend on the outcome of TPR’s anti-avoidance investigations, which have already been ongoing for over a year.  There could also be regulatory changes pending the outcome of the parliamentary inquiries.

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