Sir
Philip said he had been approached several times over the past few
months to sell BHS and is now planning to determine if any of these
can be concluded.
He
has owned the group for around 15 years. It forms part of Arcadia,
along with Wallis, Dorothy Perkins and Topshop. The chain has 180
stores across the country, with around 12000 employees. BHS recorded
a loss of £21m during its last financial year, due mainly to
competition fr om John Lewis, Primark and other online competitors.
Sir
Philip attempted to boost the brand by appointing a new management
team and adding food sections to the stores.
He
paid £200m for BHS during 2000, and has denied wanting to sell it
even though there are rumors in the industry that he wants to sell to
allow him to place more focus on the other stores in his empire. The
confirmation that he is ready to consider the bids indicates that the
bids may be close to what he is expecting to sell the chain for.
Over
the past year, the group has attracted interested from Christo Wiese,
the South African tycoon, along with investment firms, Hilco and
Apollo. Mr. Wiese has decided to break into the UK retail market by
entering into a new venture in the high street fashion market, named
Pep&Co.
Groups
like Asda may also show interest in obtaining BHS as 150 of the BHS
stores have planning permission for the sale of food.
BHS
may be losing money, but it still generates around £600m in sales
annually and is one of the best-known high street brands in the
country, as it has been around since 1928. The company is debt-free,
but carries an estimated £100m pension deficit.
The
group’s has an impressive property portfolio, which includes its
flagship store located on Oxford Street. According to retail and
property experts, a sale of the company could result in it being
broken up as department store retailers will fight for its high
prominence locations and grocery retailers looking for the stores
with permission to sell food. According to the head of retail
consultancy at Harper Dennis Hobbs, Jonathan de Mello, this type of
deal could result in the opening of major global department stores in
the UK. He said Lafayette, France and La Rinascente, Italy, have
shown interest in the UK for quite some time and the BHS store
located on Oxford Street, could be an ideal location for one of them.
The
property portfolio of the company may be its most valuable asset as
Sir Philip owns the freehold on most of his stores. The stores are
prime units and quite large, so it could be sold independently, or it
could be converted into smaller units with more value and could
result in a purchaser building a small shopping mall in a prime
location. This could be the case for BHS stores in prime locations,
particularly in London, wh ere the demand for prime retail space far
outweighs the supply.
