A South Shields store looks set to be safe under a national department chain’s major restructure.
BHS has entered into a company voluntary arrangement as it battles to restructure its finances. It has taken on accountancy firm KPMG as the supervisor in the process.
Out of 164 stores, the 77 most viable will be retained at current rents.
That includes the South Shields branch, as well as the store in Durham.
The only change is that, for the next three years, rents would be paid monthly as opposed to quarterly under the proposal.
At another 47 branches, talks could be held to try to get rent reductions down to 75 or 50 per cent of current levels.
But the BHS branch in the Middleton Grange Shopping Centre, Hartlepool, is one of 40 where a reduced equivalent monthly rent of 25% would be paid for a minimum of ten months.
If the deal is accepted, it could lead to the branch remaining open, say bosses.
Sunderland’s store is not affected as the company owns the freehold, so there is no lease liability.
Will Wright, restructuring partner at KPMG and proposed ‘supervisor’ of the CVA, said: “For almost 90 years, BHS has been one of the most iconic brands on the UK high street, but in recent years has seen its profitability decline as it has sought to respond to changing customer behaviours, increased competition and the rise in omni-channel retailing.
“Today’s CVA proposals are one facet of a wider turnaround plan, and specifically tackle one of the business’ largest fixed costs, the onerous lease arrangements across its UK-wide store portfolio.”