High street retailer BHS has confirmed today that it will file for Administration, with around 11,000 jobs across the country at risk. The company has failed to secure emergency funding in order to pay rent and staff wages.

It has been reported that BHS bosses have been in talks all weekend with Mike Ashley’s Sports Direct about the possibility of the sportswear retailer buying the department store chain, although Sports Direct were said to be concerned about the company’s debts and pension deficit.

The collapse of the 88 year old high street retailer comes just one year after being sold to Retail Acquisitions for just £1 by Arcadia boss Sir Phillip Green, and is set to be one of the biggest high street failures since the collapse of Woolworths in 2008.

BHS had apparently secured short term survival just one month ago, through a Company Voluntary Agreement (CVA) whereby they had managed to persuade landlords of 87 of their stores to cut rent by up to 75%. However, with this and creditors voting in favour of the survival plan, BHS sill needed to find £100m to continue to trade.

It is reported that the owner of BHS, Dominic Chappell, has said that “no-one is to blame, it was a combination of bad trading and not being able to raise enough money from the property portfolio”.


At Farleys, our team of specialist insolvency solicitors regularly advise struggling companies in relation to their options. The best advice for when a business is starting to decline is to seek specialist advice at an early stage, in order to be able to consider the options available to continue training as a going concern.

Employment Issues

Inevitably there will be a significant number of anxious employees including those in the North West of England waiting to learn their fate.

Even if a buyer is found, restructures at stores appear likely and this could result in redundancies and variation to employee’s contracts of employment including to their role and terms and conditions of employment.

Variations to contracts of employment are permitted providing an employee consents and is consulted, however employees are best advised to take advice at an early stage of any related consultation.

Redundancy packages are calculated in relation to age and the length of time an employee has worked for a company.
Sometimes enhanced redundancy pay or ex-gratia payments are achievable, however in this case or similar cases, employees may find themselves without a job and with little or no pay out.

There are however some monetary entitlements that can be claimed from the Government if the company is insolvent.

Farleys can provide expert employment law advice for employees at all levels including managerial and directors in relation to variations to employment contracts, redundancy; redundancy consultation and selection; appeals, unfair dismissals; settlement (compromise agreements) and redundancy and related severance packages. If you require advice and assistance please contact Farleys HR & Employment team on 0845 287 0939 or send us an email.