More than 95% of creditors to BHS Limited approved its company voluntary arrangement (CVA) proposals at a meeting earlier today.
BHS Limited is one of two companies under the BHS group and represents 125 stores. There will be a separate meeting and vote for the CVA for BHS Properties, which represents 23 stores.
“The success of the CVA of BHS Limited will enable the business to continue the group-wide updated turnaround plan and safeguard the future of BHS, protecting thousands of UK jobs,” said the firm.
The proposals, submitted to the High Court on March 3, ask landlords of 40 loss-making stores to cut rents by 75%. It is seeking a 20% or 50% reduction on a further 47 units. BHS has 164 stores in total. The terms of the CVA drawn up by BHS’s adviser, KPMG, require the approval of 75% of BHS creditors.
“On behalf of all at BHS I would like to thank our creditors and landlords for voting in favour of supporting this CVA,” said chief executive Darren Topp.
“This gives BHS the opportunity to move forward and now we can continue with the updated turnaround plan that was announced when Retail Acquisitions Limited purchased the group in March last year.
Melanie Leech, chief executive of the British Property Federation, which represents commercial landlords, said: “Each CVA has to be taken on its merits, and landlords will have thought carefully about how to respond to this, and whether the proposals make a credible case for rescuing the business, or just keeping it afloat for the next couple of years.
“Whilst the CVA will help alleviate some of the short term pressures on the company it is imperative that the owners of the company now raise capital to reinvigorate it.”
Topp 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 and a revitalised British Home Stores will emerge as we accelerate our turnaround plans.
“This is confirmation that BHS’ creditors also believe that the right strategy is in place and we have the right team to deliver that strategy.”