BHS is holding property assets worth between £100m and £200m, driving interest in the department store retailer from potential buyers despite the fact it has been losing money on the high street.
The value of BHS’s assets has not previously been disclosed, but City sources said its property was worth between £100m and £200m, making it a potentially lucrative prize.
This is thought to include property that BHS owns as well as the leases on its stores. The retailer rents its flagship store on Oxford Street, but the lease would command a premium worth millions of pounds if BHS decided to exit the site, with companies queuing up to occupy prime shops on the street.
Sir Philip Green confirmed he was looking to sell BHS on Sunday after receiving “several approaches”.
It is understood that all the talks with potential bidders been about selling BHS as a going concern and Sir Philip does not want to sell the retailer piece-by-piece.
BHS has 185 stores in the UK and employs 12,000 people. Its shops cover 5m sq ft on high streets across the UK.
John Ralfe, the pensions expert, said that BHS had an estimated pension deficit of £130m and described this as “like trying to sell your house with a toxic waste dump in the garden”.
However, Richard Hyman, a retail consultant, said a deal was “not insurmountable” because of the pension deficit, with investors attracted to BHS’s property and the company debt-free.
He said: “If Sir Philip can’t make an acceptable return from it [BHS], and he is very good, then what might the circumstances have to look like for someone to do so. I think this is about property.”
Mr Hyman said the online shopping revolution taking place in the UK was “the most significant moment in the history of retail”.
He said: “It [the industry] is massively overspaced. Two or three years ago, with prime space like this, you would have been fighting them off.”
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