New BhS Owner Seeks £70m For Revival Plan
The new owners of BhS, the department store chain, are in talks to raise tens of millions of pounds in funding just months after acquiring it from Sir Philip Green, the billionaire retailer.
Sky News has learnt that Retail Acquisitions, the little-known vehicle which bought BhS in March for £1, is in talks with several potential providers of additional debt facilities, including an unidentified hedge fund.
The chain’s management wants to sign a deal to secure up to £70m in new financing by the end of September, when big rent bills will fall due across the high street.
However, people close to BhS insisted this weekend that it was “business as usual” for the company and that the new funds were not a sign of impending financial distress.
Sources said the talks with prospective new financial partners were expected to lead to a deal soon.
In a statement issued to Sky News, a spokesman for Retail Acquisitions confirmed the talks:
“We have said all along that we would refinance to help accelerate the turnaround plan for the UK business.
“Every penny raised will support the regeneration of our portfolio of stores, returning this iconic British brand to its rightful place on the high street.
“We are excited about the future and are pleased that major financial companies share our optimism.”
BhS operates 171 stores in the UK and 78 abroad, although it has been forced to remortgage its flagship shop on London’s Oxford Street since buying the chain from Sir Philip.
Darren Topp, BhS’s chief executive, said recently that trading had been ahead of management’s expectations since the takeover, although many fashion and homeware retailers have complained of a brutal high street environment.
Sir Philip, who owns the Arcadia fashion empire whose brands include Dorothy Perkins and Top Shop, brought 15 years of ownership at BhS to an end when he offloaded the business to Retail Acquisitions.
Documents subsequently emerged showing that the Monaco-based tycoon continued to have a financial exposure to BhS in the form of a £40m loan to the company.
Little was known about the protagonists behind BhS’s new owner: they included a former racing driver, solicitor and stockbroker, but collectively boasted little experience of retailing.
Under the new regime, Mr Topp has decided to push more aggressively into food retailing despite the difficult conditions facing much larger rivals.
He has signed a deal with Booker to supply BhS’s convenience food offering, and struck agreements with Claires Accessories, Compass Group and Debenhams to bolster other areas of the department store group’s offering.
“The aim is to restore the chain as an iconic British high street brand – serving families with good-quality clothing, homeware and food,” said a source.
An announcement about deals to expand stores in the Middle East and Africa, with 35 new stores being planned, was imminent, they added.