BHS owner Retail Acquisitions plots store closures and pension overhaul

KPMG has been enlisted to draw up options that will enable the retailer to drastically reduce its 170-strong store estate as it vies to turn around the loss-making business. The Sunday Telegraph reported that Retail Acquisitions is looking to exit at least 30 stores.

It is understood that a company voluntary arrangement is one option under consideration by KPMG.

Retail Acquisitions bought BHS from Arcadia owner Sir Philip Green for £1 last year. BHS made pre-tax losses of around £85m for the year ended August 2014.

Since taking over, the new owner has slashed costs and sought to improve its balance sheet with a £65m loan from Grovepoint Capital.

Separately, Retail Acquisitions has hired advisory firm Grant Thornton to reduce the financial burden of the retailer’s pension scheme.

This could mean scaling back funding, offloading the scheme to a specialist pension buyout firm, or even hiving it off into the Pension Protection Scheme.

BHS’s pension plan has a large deficit. The trustees’ most recent estimate of the shortfall was £207m but it is expected to increase at its next valuation.

A spokesman for Retail Acquisitions said: “BHS has stated publicly many times since the acquisition that it would like to take steps to address a number of unprofitable stores. This may involve discussions with some landlords, and KPMG will help us in this process.”

“We have made no secret of the fact that, like other companies, we have a pension deficit that we would like to address and we continue to take advice in relation to this complex area.

“Our turnaround plan is still in its first year. Although we still have a long way to go, we are entirely confident that we will regain our place as an iconic British high street brand.”