‘Business as usual’ for BHS in Malta as UK retailer goes into administration

UK retailer British Home Stores has officially gone into administration, putting 11,000 jobs at risk unless the firm is taken over. But the holder of the BHS franchise in Malta was told that “it’s business as usual” by the mother company. 

Camilleri Group holds the franchise for the British high street retailer in Malta and Libya and speaking to MaltaToday,  managing director Tonio Camilleri said “the only message we have received from the UK is that ‘it’s business as usual’.” 

Camilleri said he learned of the collapse from media reports.

Asked whether the franchise owner was concerned and whether a contingency plan was in place, Camilleri said “I’m obviously very concerned about the situation in the UK and if I knew anything else I would let you know, but that’s all I know.”

He explained that the group has four BHS shops in Malta and employs some 70 people. The company also runs two BHS shops in Tripoli, Libya.  

BHS has been struggling under €1.7 billion of debt, a slump in sales and years of losses, but there were hopes it might pull through with an injection of cash.

But the retailer failed to find a buyer and talks to secure a last-minute emergency have collapsed, forcing the company to seek official help to pay its debts.

Going into administration, a form of creditor protection, means it is Britain’s most high-profile retail casualty since Phones4U in 2014 and Woolworths in 2008. 

But British business minister Anna Soubry reassured that there are no plans to make immediate redundancies. “The clear message is that BHS is still open for business as usual. There are no plans for immediate redundancies or store closures,” she told the House of Commons.

BHS’s former owner Philip Green, the billionaire retail boss who sold the firm for one pound last year to a collection of little known investors called Retail Acquisitions has been blamed for the retailer’s demise. He bought it for €260 million in 2000 and made hundreds of millions in dividends over the next few years.

Green is facing calls to be stripped of his knighthood after it was revealed that he took out more than €750 million from the company, which he left with a pensions deficit of €737 million, for which he is now on the hook. 

However, when the chain began to struggle in the face of online competition Green was unable to turn it around and offloaded the company for a nominal sum. 

Pension regulators have been pushing for Green to inject some of the profits he made from BHS back into the retirement fund for current and former workers.

He is understood to have offered €50 million but officials are demanding more because of the money he made from the company during his 15-year ownership.

Green will now be appearing in front of MPs to answer questions in the course of an inquiry launched by the Work and Pensions Committee on Tuesday. Asked if the chairman of the committee, opposition Labour lawmaker Frank Field, would invite Green to be questioned, Field’s office said: “He’s very sure he will be invited.”

Philip Duffy and Benjamin Wiles, managing directors of restructuring firm Duff & Phelps who have been appointed joint administrators have said that the group will continue to trade as usual whilst the administrators seek to sell it as a going concern. 

Analysts see little prospect of a buyer emerging for the whole of the high street retailer, given the difficulty Green had in finding suitors. 

The most likely scenario is that BHS’s assets will be sold off piecemeal and a source close to the administration process said more than 30 expressions of interest for various parts of the business had already been received. 

Ultimately, analysts think it likely that the BHS name, like Woolworths before it, will depart from Britain’s shopping districts.