BHS to sell Oxford Street lease to Abu Dhabi landlord

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Oxford Street lease close to being sold to landlord Abu Dhabi royal family
Leases on other stores also likely to be sold
Pension Protection Fund reportedly close to taking 33% stake in BHS

BHS is to sell its Oxford Street flagship lease to the landlord, Abu Dhabi’s ruling family, as part of its plans to restructure.

The department store chain, which is currently fighting to survive, is close to securing a £55m deal with Lancer Property Asset Management, which acts on behalf of the family, according to the Sunday Times.

As previously reported by Retail Week, Polish giant Lubianiec Piechocki i Partnerzy (LPP) previously signed “a preliminary lease of retail space” with BHS to take space in its Oxford Street store and bring its Reserved fashion fascia to the UK.

LPP, which operates 1,574 shops in 17 markets, had drafted in Ergo Store, a Polish company that specialises in the design and fit-out of retail stores, to transform part of the store into trading space for the business.

Sources close to the situation told Retail Week that LPP had agreed a 25-year lease worth 675 Polish Zlotys (£116.5m) on the property, but it could now do a deal directly with Lancer Property Asset Management as it plots its UK debut.

As Retail Week reported last week, leases on other BHS stores likely to appeal to retailers are also up for grabs.

Last week, BHS emerged victorious from its CVA after creditors voted in favour of its proposals to pay reduced rent on much of its store estate.

The embattled department store group launched the CVA earlier this month in a bid to slash its rents and claimed its potential collapse could cost creditors £1.3bn.

In addition to the CVA, BHS plans to cut 370 jobs across its headquarters and stores as it tackles its financial issues. It will also invest in improving its online business and plans to significantly reduce promotional activity in a bid to turn around the ailing business.

It was reported over the weekend that the Pension Protection Fund (PPF) was on the verge of taking a stake of at least 33% in the business, which had just weeks to explain to the PPF, its biggest creditor, how it plans to cover the £571m black hole in its pension pot.