PORTSMOUTH’S BHS store has been spared the axe after creditors approved controversial plans to turn the business around.
The department store chain was thrown a lifeline when creditors backed two company voluntary arrangements (CVA) designed to revive its ailing business by cutting costs and preventing widespread store closures.
The company said the immediate future of the firm was secured when 95 per cent of creditors and landlords voted in favour of a CVA for BHS Limited, which represents 125 stores.
A second CVA for BHS Properties Limited – which oversees 23 BHS stores – was also voted through with a majority of 75 per cent. The Fareham store was not at risk.
The announcements come after it was feared the company could plunge into administration and put more than 10,000 jobs at risk if creditors and landlords failed to back plans to shore up the business.
The firm had put forward CVA proposals which asked landlords to cut the rents by 50 per cent or 75 per cent on 47 stores.
It has also told landlords that it needed rents to be reduced ‘substantially’ on 40 more stores, or risk seeing them close within 10 months.
But the company said it will pay the rent at the current rate on 77 of its ‘most viable’ stores by making monthly rather than quarterly payments for the next three years.
BHS chief executive, Darren Topp, said the decision by the creditors and landlords to back the CVA has given the company the ‘opportunity to move forward’.
He added: ‘It is a tough time for retailers across the UK with huge structural challenges faced by all, however, we have a very credible plan to return BHS to growth and profitability.’
BHS announced this month that it would axe 150 staff from its head office and 220 from its shops in a move to cut costs.
David Gill, national officer of the shopworkers’ union Usdaw, said: ‘We hope it is the beginning of a recovery for the company and leads to greater job security for staff.’