Home / Business / Business chief criticises BHS directors

Business chief criticises BHS directors

BHS store

Image copyright
Getty Images

A business leader has accused the former owners of BHS of “lamentable failures”, saying its collapse has fuelled public distrust UK plc.

Simon Walker, head of the Institute of Directors (IoD), told Radio 4’s Today that Sir Philip Green has a moral responsibility to the retailer’s staff.

The IoD normally promotes the cause of business, but Mr Walker said there were still many unanswered questions.

Sir Philip is due to give his side of the story to MPs later this month.

It was announced on Thursday that the department store will be wound down with the loss of up to 11,000 jobs after efforts to find a buyer failed.

BHS, sold by Sir Philip last year for £1 to former racing driver Dominic Chappell, went into administration in April.

Mr Walker told the BBC that the collapse of BHS “has the potential to be deeply damaging to the reputation of British business”.

He said: “We spend a lot of time agonising about the loss of trust in the business community, and I think we can see why this is. I think there is a lamentable failure of behaviour and there are a lot of questions that need to be asked.”

Sir Philip, he says, has “moral responsibilities” over the demise of the firm and plight of the pension scheme.

The billionaire owner of the Arcadia retail empire has been accused of taking money out of BHS while the pension fund sank deep into deficit.

Media captionThe BBC’s Keith Doyle reports: “Great sadness and shock for the staff”

Mr Walker said: “You can’t just get yourself off the hook by selling a business to someone who’s been bankrupt three times and is a former racing driver with no retail experience.”

He acknowledged that “BHS was probably going to fail anyway”, but added: “It’s the manner of its failure and the fact that it ends up dumping huge liabilities on to the taxpayer that is a problem, and it is the lack of due diligence in selling it (to Mr Chappell)… something’s wrong”.

Two Commons select committees are holding hearings into the demise of BHS, and Sir Philip, Mr Chappell and other directors are due to give evidence later this month.

Sir Philip said on Thursday that he was “saddened and disappointed” by the biggest retail collapse since Woolworths in 2008.

A spokesman said the owner of the Topshop chain had hoped to see the company sold as a going concern.

Arcadia advisers have previously said that the business was sold to a company, not an individual, and that they were presented with a credible business plan.

BHS’s administrators Duff & Phelps said on Thursday that they had failed to find a buyer and that all 163 stores will be holding closing sales over the coming weeks.

Duff & Phelps blamed “seismic shifts” in the retail sector for the collapse of the chain.

The jobs of 8,000 members of staff are likely to go, while a further 3,000 jobs of non-BHS employees who work in the stores may also be at risk.

“The British High Street is changing and in these turbulent times for retailers, BHS has fallen as another victim of the seismic shifts we are seeing,” said Philip Duffy, managing director of Duff & Phelps.

Hilco Retail Services has been appointed to assist in the process of winding down the BHS store network.

Hopes of rescuing the store chain had rested on a late offer from a company led by retailer Greg Tufnell and reportedly backed by Portuguese money.

Other bidders who failed to convince the administrators included a consortium led by Matalan founder John Hargreaves, as well as separate offers from Sports Direct’s Mike Ashley and Poundstretcher boss Aziz Tayub.

All copyrights for this article are reserved to bbc business

Check Also

83926406_hi027925596

Bookings down for terror-hit tourist countries

Image copyright Getty Images Image caption Armed police now patrol Tunisia’s beaches after a gunman ...