BHS ‘could have been saved’ – Chappell

Shopper carrying BHS bags outside BHS storeImage copyright
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The man behind the takeover of BHS has said his plan to revitalise the retailer “could have worked”.

Dominic Chappell headed up a group called Retail Acquisitions, which bought BHS from Sir Philip Green for a nominal £1 in 2015.

He told the BBC’s Newsnight: “We could have saved BHS”.

Mr Chappell said he was “upset and devastated” about the company going into administration, but that he had no regrets about doing the deal.

Mr Chappell blames two things, though, for the failure of his plan.

Firstly, Christmas trading, which is the mainstay of any big retailer, was well below expectation.

Secondly, he says he was badly affected by the decision of the pensions regulator to launch an inquiry into the takeover of BHS, known as an anti-avoidance case.

Mr Chappell maintains that the effect of that case was to make it almost impossible for him to get credit from frontline banks, pushing him to take on high-cost loans in order to cover costs. He borrowed at an interest rate of 15% and says “the impact of the regulator is one of the main things that knocked us over”.

Portrayal ‘too harsh’

Mr Chappell has faced criticism ever since his deal to buy BHS was announced. A man with no retail experience, he has been declared bankrupt three times – although Mr Chappell told me that he expected one of those bankruptcies to be annulled within weeks.

His lack of experience has raised questions over whether he was an appropriate man to buy such a large business. However, those close to the deal insist that Mr Chappell came across as a perfectly legitimate businessman, with colleagues who were experienced in corporate turnarounds.

He also had advisors from two of the City’s best known firms – accountants Grant Thornton and law firm Olswang. “My portrayal has been too harsh,” said Mr Chappell.

“Yes I’ve had two bankruptcies, but the long and the short is that I had a strong board, internationally renowned companies representing me, and I was prepared to spend a lot of money on BHS.

“We were faced with some serious problems. We reduced the overheads of the company and I am confident that, if we could have kept trading, we would have been breaking even in September of next year. We had made huge progress.”

BHS ‘has a future’

As for regrets, he said he should have been quicker with introducing the Company Voluntary Arrangement, which was eventually voted through in March and saw rents fall at many stores. When it came, he said, it received “overwhelming support”.

As for now, Mr Chappell remains hopeful that BHS can still live on. He is involved in one of the bids presently being considered by the administrator, Duff and Phelps.

“The company has a future – it doesn’t need to be the PanAm of the High Street,” he said.

BHS ‘could have been saved’ – Chappell

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