Saturday, February 23, 2019

Landlords face £110m business rates hike over empty BHS stores

BHS audit

The ghost of BHS‘s collapse is set to continue to haunt landlords of empty stores once occupied by the department store chain, with reports indicating they are set to face a £110 million business rates hike.

According to the Mail on Sunday, a year after BHS‘s collapse, landlords are not only going to have to pay the business rates on these empty stores, but they also face huge refurbishment costs and unsecured creditors could lose more than 90 per cent of their money.

Mail on Sunday added that BHS liquidators, which mostly used leased sites, have accelerated the pace of returning property contacts to landlords.

More than 100 of the 164 former BHS stores are still empty one year on, and it is estimated that around 50 of those could remain empty in the long term due to their size or undesirable locations.

Primark has acquired nine former BHS stores, the most from any of the new tenants, followed by Sports Direct which has taken six stores for its various retail fascias.

Meanwhile, the Edinburgh Woollen Mill (EWM) Group is about to open a new department store concept in BHS‘s former space in Carmarthen, South Wales, and Polish retailer Reserved will make its UK debut by taking over part of the former BHS flagship on London‘s Oxford Street.

READ MORE: Arcadia’s Outfit makes high street debut in former BHS unit

Other notable new tenants taking over former BHS units include Zara, H&M, New Look, Arcadia Group‘s multi-fascia Outfit chain and independent department store Morleys.

BHS was part of Sir Philip Green’s Arcadia Group retail empire for 15 years before he sold it for £1 to former bankrupt Dominic Chappell in March 2015.

The department store chain plunged into administration 13 months later in April 2016, affecting 11,000 jobs.

The collapse stayed in headlines for months after both Green and Chappell were embroiled in BHS’s £571 million pensions deficit scandal, which affected 19,000 pension holders.

In February, Green made an agreement with the Pensions Regulator to pay £363 million to settle the BHS pension black hole.

However, the fate of his knighthood remains uncertain due to his handling of BHS and concerns raised over the settlement.

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