The chief executive of BHS has insisted the department store chain has enough cash to survive but warned it could take two to three years to turnaround the business.
Darren Topp said it would be “hard bloody work” to revitalise BHS but the controversial new owners of the high street retailer are “incredibly supportive”.
Sir Philip Green, the retail tycoon, sold BHS for £1 in March to a little-known collection of financiers, lawyers and accountants.
Concerns about the future of the retailer, which employs more than 10,000 staff, have grown since then. It emerged that Dominic Chappell, who led the buyout, is a former bankrupt, that the new owners were considering closing 50 stores, and that credit insurers were refusing to support BHS’s suppliers, meaning the retailer had to pay upfront for stock.
However, Topp insisted BHS still has a place on the high street. “100%,” he said. “We have one million customers a week at the moment. That is a million reasons a week why we have got a place.
“We are determined that we are going to turn this business back into that iconic British brand that certainly I remember as a child growing up.
“We have always said this is a two- to three-year turnaround plan. We can’t do it overnight. We are going to have to roll our sleeves up, it’s going to be hard bloody work and we are going to have to spend some money in upgrading the estate. We are at the start of this plan.”
The BHS boss was speaking as the retailer unveiled a revamp of its shop in Watford, Hertfordshire. The retailer is refurbishing 20 of its 170 shops before Christmas. It is installing food departments into the stores, revamping the cafes and restaurants, and has modernised the layout of the clothing aisles with new mannequins and posters. The logo has also been overhauled so that the full name, British Home Stores, is used.
BHS said earlier this week that it had secured a £65m loan from London-based investment group Grovepoint Capital and now has £85m of cash to fund operations.
Topp insisted the retailer, which lost £85m last year, now has the funds to rebuild.
“We believe we can do it and we are determined to do it,” said Topp, who has worked for BHS for six years and became chief executive in March. “We have got the cash to do what we need to do and we think we can get this business turned around.
“I think like most businesses we look at the next six months, the next 12 months, and we can see that we are fully funded. More importantly, we have got the cash to deliver the turnaround initiatives that we believe will start to bear fruit.”
When asked if that meant BHS only had funds for the next six months, he added: “No, no, no, beyond that. I think it would be unhelpful to give an end date. There are a lot of variables in there. The truth is we have got the cash to deliver the initiatives that we believe will turn the business around.”
Topp said that Chappell and his team at Retail Acquisitions, the vehicle he used to buy BHS, had been key to securing the new loan. However, he admitted that they “didn’t know anything about them” before the deal.
“There is lots of stuff written about Dominic but the truth is I can only tell you as I’ve found him - I’ve found him incredibly supportive,” Topp said. “He is determined to turn the business around, I think he has been a force for good in the business. He was instrumental in the refinancing, he led that. That is the kind of thing he does, and that is where he has been really helpful.”
Topp admitted that BHS is considering shutting stores but said the company had no plans to “close 60 in one go”.
He said: “Like most retailers I have got a few at the bottom end that frankly look a bit ugly. Closure might be one of the options, but we might sublet, we might re-let, we might cut and carve them.
“We will close some, I am sure. We have closed a handful every year for the last five or six years, but if you are saying to me are we going to close 60 in one go, no is the answer.”
BHS has appointed property agents Harper Dennis Hobbs and Jackson Criss to review the future of its flagship Oxford Street store. It is understood that BHS is considering splitting the shop into three parts and offloading two-thirds of the space to other retailers.
Despite Topp’s optimism, he admitted it was “tricky” trading without support from some credit insurers.
“The key thing for me is that it has not stopped us buying any product that we want to buy,” he said.
“It’s not stopped the business functioning. It’s been tricky, but I have got some people offering insurance, some people not. It’s been one of the challenges that we’ve had, but the truth is that it hasn’t stopped us doing anything that we wanted to do.”
