As many as 30 BHS stores could close as the U.K. fashion and home goods retailer seeks a turnaround.
British newspaper The Telegraph revealed Sunday that Retail Acquisitions Ltd. has enlisted KPMG’s help in restructuring the troubled chain, which could include cutting its 170-strong store count as well as shaking up its pension scheme.
BHS, which lost 85 million pounds ($122.5 million) in the year ended Aug. 30, 2014, secured a 65 million pound loan ($93.7 million) last September from London-based investment group Grovepoint Capital. Earlier this year it received another cash injection when it agreed to lease its Oxford Street flagship to Polish clothing retailer LPP.
Now, Retail Acquisitions is kicking its turnaround plan up a notch, but it’s not the first time the owner has considered closing several stores. Following its acquisition of BHS from Sir Phillip Green’s Arcadia Group for 1 pound (about $1.44) last March, 52 underperforming locations were put under review.
The Telegraph said that some of the options drawn up by KPMG include a Company Voluntary Arrangement (or CVA, whereby landlords would vote to accept reduced rents before the stores close down) or one-to-one negotiations with individual property owners.
Additionally, the retailer’s pension plan could be overhauled. Accounts filed at Companies House last summer showed that its scheme deficit rose to 139 million pounds ($200.3 million) in the year ended Aug. 30, 2014, from 136.6 million pounds ($196.9 million) the year before. According to the pension trustees, that could increase to more than 207 million pounds ($298.3 million) at its next valuation.
“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,” a spokesman for Retail Acquisitions told The Telegraph. “We have made no secret of the fact that like other companies we have a pension deficit that we would like to address also and we continue to take advice in relation to this complex area.”
He added, “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.”