British high street retailer BHS has gone into administration putting 11,000 jobs at risk. It is thought that up to 164 stores could close.
Administrators have said that efforts to find a buyer for the group have been unsuccessful, and that due to a lower than expected cash balance, it is unlikely that the company will meet all it's contractual obligations.
BHS has debts of more than £1.3 billion. This includes a pension fund deficit of £571 million. Both of these obstructed rescue talks over the weekend.
In the meantime the company will trade as usual, and owner Dominic Chappell has promised to work with administrators to find a solution.
“No-one is to blame. It was a combination of bad trading and not being able to raise enough money from the property portfolio. In the end, we just couldn't reach an agreement with Arcadia over pensions,” Chappell told the Press Association.
BHS made headlines last year when it was bought by Retail Acquisitions, which headed by Mr Chappell, for £1 from billionaire Sir Philip Green of the Arcadia retail empire. The Arcadia group bought BHS in 2000 for £200 million.
It has been reported that Green offered £80 million towards the pension deficit. However, the regulator may pursue Arcadia for further payments.
Sir Philip Green may face questions from MPs
It is thought that Green may be called before MPs to face questions over the failure of BHS. Work and pensions committee chair Frank Field told the press that he was sure Sir Philip "will be invited." The committee will investigate how the collapse of BHS will affect the Pension Protection Fund. It is also thought that the Pensions Regulator will investigate whether or not Arcadia avoided their pension obligations.
John Mann, a Labour member of the Treasury select committee, has called on Sir Philip to reimburse BHS the £400m of dividends that he took out of the company.
"Sir Philip Green and his family have made millions out of BHS and its hardworking staff. He took over a company with a healthy pension pot, yet when he sold BHS a black hole had appeared in its fund," Mann said.
"There is a very simple and honourable solution to this crisis: repay the dividends, live up to the name he has chosen for his new yacht, 'Lionheart', or lose his knighthood."
The collapse of BHS is the UK’s biggest retail failure since Woolworths in 2008.