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Government statement on BHS administration - live updates

Discussion in 'Market News' started by Lily, May 4, 2016.

  1. Lily

    Lily Forum Member

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    Anna Soubry has told the Commons that the government hopes a buyer can be found for BHS


    10.26pm BST

    And finally, here’s our editorial on the collapse of BHS, and the long run of mistakes and poor business practices that led to today’s administration:

    As the government-run Pension Protection Fund prepares to rescue the BHS pensioners, the familiar mismatch between private profits and public losses is in evidence once again.

    eanwhile, hollowed-out husks could soon blight 100-plus high streets, yet another story of common space being disfigured after private greed enjoyed free reign. And a community used to being fleeced could be left with another nasty outbreak of British heist sores.

    10.21pm BST

    The BHS crisis makes the front page of Tuesday’s Guardian, and the news that its newish owners have taken £25m out of the firm.

    BHS owners took £25m out before collapse.
    Sir Philip Green's legacy
    Tomorrow's Guardian pic.twitter.com/Pydeg2CLcB

    10.00pm BST

    Sarah Butler has looked into how the Green family have benefited from BHS over the years, and writes:

    When Sir Philip Green bought BHS in May 2000, he insisted it would not be rocket science to revive the ailing high street retailer. After paying £200m, he was convinced he had the skills to secure its future and make it the foundation of a sprawling retail empire.

    But last year, after failing in his mission, Green sold BHS for £1 to a little known group of investors who have steered it into collapse in just over 12 months. His dreams for the chain may have come to nothing, but Green’s family have still been big winners from BHS, taking out more than £580m in dividends, rental payments and interest on loans to help fund a lavish lifestyle....

    Related: How Philip Green's family made millions as value of BHS plummeted

    8.58pm BST

    Writing in the Guardian tonight, retail expert Mary Portas argues that BHS could have been saved from collapse with a bit more imagination.

    Here’s a flavour:

    If I had been at British Home Stores I would have looked at today’s market place and created a brand that is relevant for today’s shopper.

    I would have gone totally after the value market, but made it functional and cool.

    "British Home Stores had a place in the heart of the 1970s shopper" @maryportas https://t.co/rm6upSVWOW #retail #innovation

    7.17pm BST

    It’s a balmy 16 degrees in Monaco tonight. But if Sir Philip Green is there, he may just have felt the chill of criticism from the House of Commons.

    Labour’s Angela Eagle put the former BHS owner firmly in the spotlight this afternoon, saying he faces “serious questions”.

    6.52pm BST

    The final question goes to Martin Docherty-Hughes, SNP MP.

    The real scandal is that BHS workers face redundancies, and losing 10% of their pensions. Can the minister promise that all inquiries into BHS will be open and transparent, and that the ‘full force of the law’ will be used, if needed?

    6.46pm BST

    Labour MP Diana Johnson warns parliament that BHS could be a repeat of the collapse of Comet.

    When Comet went into administration in 2012, there were 7,000 redundancies and the taxpayer paid up to £100m in redundancy costs.

    Just asked Minister about similarity between developments at BHS and what happened with Hull's Comet in 2012 - https://t.co/CQhT6jWl6Y.

    6.41pm BST

    Cardiff MP Jo Stephens asks whether the Insolvency Service has the resources to help BHS workers, given its budget is being cut.

    Soubry says she has full confidence in the insolvency service.

    6.39pm BST

    Labour MP Gavin Shuker says the UK retail sector is dominated by low pay and lack of opportunity, and also dominated by women workers.

    Will the government do more to help regenerate the sector?

    6.36pm BST

    SNP MP Roger Mullin says BHS workers are paying the price for Philip Green’s failure, while he awaits for his new yacht.

    Why shouldn’t Green be forced to pay the full £591m pension blackhole?

    6.35pm BST

    Our market economy is dangerously undermined when the privatisation of vast profits isswiftly followed by the projections of similarly large losses onto other people, whether taxpayers or pensioners, says Conservative MP Steve Baker.

    Could the government look at the treatment of excessive debt, to avoid a repeat?

    6.30pm BST

    Q: Will Anna Soubry meet with the USDAW union to discuss how to save BHS jobs?

    I’ll meet with pretty much anyone, Soubry replies. She’s happy to meet USDAW, and try to persuade them to change their view on Sunday trading.

    6.26pm BST

    Q: Does Soubry know whether the BHS trustees signed off the BHS £1 last year. Were the Pension Protection Fund involved? And if not, could we close this loophole?

    Soubry says she doesn’t know, but will write and find out....

    6.23pm BST

    Grimsby MP Melanie Onn says her constituency has lost Woolworths, Comet, Staples, Phones4U and now a WHSmiths store.

    She asks Soubry if she is concerned that BHS generated £100m through ‘negative goodwill’, which was then paid out in dividends rather than reinvested.

    6.20pm BST

    Soubry replies that capitalism must have a caring heart.

    She agrees that Fuller is raising very serious issues, and we must see what conclusions the regulators come to.

    6.17pm BST

    Richard Fuller, Conservative MP, says that the former owner of BHS [Philip Green] may have gone “laughing all the way to the bank” when Retail Acquisitions offered to buy the group for £1.

    But....

    If that sale was done on the understanding that he was avoiding a responsibility for those pension losses, then £1 was equivalent to 30 pieces of silver for that betrayal of the employees and pensioners.

    6.10pm BST

    SNP MP Alison Thewliss asks what the government is doing for workers at other companies why rely on BHS.

    Soubry says that we know that other companies in a supply chain suffer when one business fails. That’s why we must stay positive and hope a buyer can be found.

    6.07pm BST

    Conservative MP Peter Bottomley say he visited a BHS branch today and told workers that they have the full support of the House of Commons.

    Workers jobs and pensions must be a top priority, he adds.

    6.05pm BST

    Many questions about pensions issues at BHS from all sides of the house, how a £5 million surplus can evaporate into a £571 million deficit?

    6.05pm BST

    Labour MP Ian Wright says it cannot be right for Philip Green to load BHS up with debt, fail to invest, pay his wife £400m in dividends, and live in a tax haven.

    Something is gravely wrong, he says. New legislation is needed to prevent owners making a fast buck.

    6.01pm BST

    The SNP’s Hannah Bardell says her party stand in solidarity with BHS workers at this time.

    She says there are some very serious allegations in the newpapers today, including the FT’s article about the £1bn ‘siphoned out of BHS’

    5.57pm BST

    Conservative MP Mark Field says he is concerned that the Pension Protection Fund is being used as a bargaining chip, rather than in exceptional cases when a firm fails.

    Field says he shares the opposition’s concern over the behaviour of the current and former BHS owners.

    5.56pm BST

    Anna Soubry’s statement on BHS is online here.

    5.55pm BST

    Responding to Eagle, Soubry says her concern is for the workers at BHS, and its creditors.

    Eagle is turning this into a party political game, she claims.

    5.52pm BST

    Philip Green has taken hundreds of millions out of BHS, and then walked away to his favourite tax haven leaving the pensions protection scheme to pick up the bill, Eagle continues.

    She cites the Guardian’s revelation that BHS’s new owner, Retail Acquisitions, has received more than £25m in the last 13 months.

    5.47pm BST

    Labour shadow minister Angela Eagle responds to Anna Soubry.

    11,000 BHS staff will be very worried today. All MPs must hope that BHS can be sold as a going concern.

    5.44pm BST

    Anna Soubry adds that there has been “some speculation about the BHS pension scheme”.

    She can’t comment directly, but understands that the Pension Protection Fund is assessing the final funding position of the scheme, and who is responsible for its shortfall.

    5.41pm BST

    Over in parliament, small business minister Anna Soubry is making a statement about BHS’s collapse now.

    Soubry says that it is very difficult time for all the employees - up to 11,000 across the UK.

    I understand that there are no plans for immediate redundancies or store closures, and that the administrators are looking to sell BHS as a going concern.

    5.28pm BST

    If you’ve been following the blog today, you’ll already know that Damien has been interviewing shoppers about the decline and fall of BHS.

    Here’s his full piece from Oxford Street:

    Related: Shoppers on BHS: 'It's the sort of store that you go to with your nan'

    5.25pm BST

    While we wait for the government’s statement on BHS, here’s a picture of Sir Philip Green’s new superyacht:

    Sometimes picture tells 1,000 words: Philip Green, former BhS owner, gets 3rd luxury yacht https://t.co/0nxeRwGliz pic.twitter.com/CUIe2dV5sN

    5.03pm BST

    More details are emerging of payments made to Retail Acquisitions, which bought BHS in 2015 for £1.

    Graham Ruddick and Sarah Butler report that more than £25m was paid from BHS to its owner, Retail Acquisitions, in the 13 months between the department store’s sale and it collapsing into administration.

    Related: BHS paid more than £25m to owner in 13 months before administration

    Related: BHS collapses into administration as rescue deal fails

    Related: Dominic Chappell and the BHS takeover that alarmed retail watchers

    4.54pm BST

    Back in the City, the FTSE 100 has closed down 0.8% or almost 50 points, at just shy of 6261. Miners and energy companies have pulled the wider index down as oil prices have slipped - Brent crude is down 0.7% at $44.8 per barrel.

    As we reported earlier, the news that BHS has collapsed into administration, did little to dent investor appetite for retailers’ shares. Marks & Spencer shares are up more than 1%, ASOS shares are up 0.9% and Boohoo is up 5.3%.

    4.03pm BST

    Earlier we heard from the head of shopworkers’ union Usdaw, John Hannet, on how administrators will want to avoid repeating mistakes made after Woolworths’ demise in 2008.

    The need to follow a fair process was illustrated by the collapse of Woolworths, which saw large claims over how the redundancy consultation had been conducted. On top of compensation for unfair dismissal, employees may also be entitled to up to 90 days’ pay if there has been a failure in the collective consultation procedures.

    3.45pm BST

    More commentary is coming in on how much, or how little, BHS’s position is a function of the current retail climate.

    Gary Hobbs, senior equity analyst at Investec Wealth & Investment, says:

    “Whilst conditions on the high street have been tough, as witnessed by the likes of Next, we suspect that the travails at BHS are as much a function of their financial position as they are a reflection of slower trading.

    “We do not envisage any material ramifications elsewhere for retailers, though there might be some work to do for the landlords of BHS’ store portfolio.”

    3.39pm BST

    Some of BHS’s retail rivals - with the notable exception of Next - seem to be faring well from its bad news on stock markets this afternoon.

    Connor Campbell, financial analyst spread betting company Spreadex comments:

    After teasing flatness at lunchtime the FTSE gave up the ghost as the day went on, reverting back to a 40 point loss as a dismal showing from its commodity stocks compounded the sense of unease that greeted BHS filing for administration.

    “BHS’ rivals have largely benefited from its collapse this Monday, be it online stores like ASOS and Boohoo (the latter seeing a 5% rise ahead of its preliminary results tomorrow), or similarly recognisable high street staples like Marks & Spencer and Sports Direct. Interestingly Next bucked this trend, falling nearly 1.5% as the company’s investors wondered if they were looking at the Ghost of High Street Future.”

    3.28pm BST

    Back on Oxford Street, Damien Gayle, has been sounding out more shoppers on what went wrong at BHS.

    “I have, when I was a kid though, my nan used to take me there. Me and my nan used to pop into the shopping centre and she used to say: ‘I just have to go into BHS’.”

    Related: BHS collapses into administration as rescue deal fails

    3.14pm BST

    On financial markets, it’s been a lacklustre day for the FTSE 100 share index.

    Last April the market was riding high with the Footsie breaking new ground for the first time since 1999. Twelve months on, and the UK’s headline index has had a reality check, losing a fifth of its value from peak to trough, as commodity and banking stocks plummeted.

    “It’s easy to get carried away with the twists and turns of the FTSE 100, but it’s important to bear in mind the headline index is heavily influenced by the performance of the largest stocks, so doesn’t give the full picture of how UK plc is doing.

    2.58pm BST

    Damien Gayle has been speaking to more shoppers on and around Oxford Street this afternoon and getting more of a sense of how UK consumers have fallen out of love with BHS.

    Hayden Clottey, 23, was browsing the boutiques of Carnaby Street, close to the BHS flagship store. Asked why he wasn’t shopping in BHS, he said:

    I’ve shopped there before. I used to have a friend who worked there. It’s alright, you can get pretty much everything there. It’s always a safe bet when you have to get presents for people - just the little packages of soap and things like that. I wouldn’t selectively go in there I suppose.”

    It doesn’t really bother me - it’s no Woolworths. Bring on change.

    “ I can remember going there with my nan. It was that sort of shop that you go to with your nan and your parents.

    We look at everything that’s really expensive and then go to buy it
    in Primark,” she laughed.

    “I’ve never bought anything from there [BHS]. Maybe we will go and look when everything’s on sale, get my nan’s Christmas presents for the next five years.”

    2.46pm BST

    Our financial editor Nils Pratley has some stern words of advice for Dominic Chappell, boss of BHS owner Retail Acquisitions, and he has some tough questions about the £571m deficit in the pension fund and the onus on previous BHS owner Sir Philip Green to sort out the mess.

    Given the odds against the BHS “project” succeeding – there is an urgent question. How much responsibility for the £571m deficit in the pension fund lies with Sir Philip Green, who sold BHS to Chappell and his inexperienced crew for £1 a year ago.

    The answer is clearly not none. The principle is clear: former owners cannot wash their hands of a pensions problem simply by selling a business for a token sum...

    Related: Sir Philip Green must sort out the BHS pension mess

    2.21pm BST

    Usdaw - the Union of Shop, Distributive and Allied Workers - has put out a statement calling for urgent talks with BHS. General secretary John Hannett has also drawn parallels with Woolworths as he urges the administrators to include workers in their decisions.

    Hannett says in a statement:

    “This is devastating news for the employees of BHS and we urge the company to change their attitude to trade unions and begin a dialogue with us at this difficult and worrying time.

    “We also urge the administrators and the company to comply with the law, consult with staff and Usdaw as the union for BHS workers. We don’t want to see BHS staff locked out of discussions, sent to the back of the queue of creditors and treated like fixtures and fittings, as happened at Woolworths.”

    2.05pm BST

    Moving away from developments at BHS for a moment, jobs are also under threat at oil company Royal Dutch Shell.

    Related: Shell to close three UK offices housing 1,600 staff

    1.51pm BST

    The time of that statement to parliament has shifted again, now to the slightly earlier time of 5pm

    Second statement today, @Anna_Soubry on #BHS entering administration, is expected at approx 5pm https://t.co/52NULdSGgN

    1.42pm BST

    Time for a quick recap.

    The UK pensions regulator has confirmed it's launching an investigation into the BHS pensions scheme

    1.30pm BST

    The collapse of BHS is a personal blow to Labour’s shadow chancellor, John McDonnell:

    Sad news about @BHS. My Mum worked there for 30 years.Critical @UsdawUnion are fully involved in discussions about future to protect workers

    1.26pm BST

    Our colleague Amelia Gentleman would like to hear from BHS staff:

    Looking for an #BHS employee to talk to about the impact of today's news. Email me amelia.gentleman@theguardian.com

    1.15pm BST

    Sir Philip Green’s 15-year ownership of BHS is in the spotlight today.

    The Financial Times’s Alphaville site have published a handy explanation of how the Green family did rather well out of the retailer.

    Here, in very rough terms, is how the finances worked. It’s an open question as to whether, with a little less financial engineering, this business might yet have survived.

    Green, a short man with a famous temper, acquired BHS (on behalf of his wife) for a pittance back in 2000. The store chain was in dire shape, but was conceivably worth more than he had paid. So Green booked circa £100m of ‘negative’ goodwill through the P&L, declaring BHS to be surprisingly profitable. Magic.

    Paul Murphy on BHS administration is fab. https://t.co/HRYaGg1Jvi

    1.02pm BST

    Then again....

    Busy day in Parliament - Soubry statement on #BHS now shifted back to 5.30ish

    12.52pm BST

    Update: business minister Anna Soubry will speak to parliament about the BHS crisis, at around 4.30pm....

    At 3.30pm UQ - @EmilyThornberry - Shipbuilding on the Clyde, then 2 statements: 1. @Jeremy_Hunt - Junior Doctors 2. @Anna_Soubry BHS

    12.45pm BST

    BHS vouchers can still be used to part-purchase goods, reports Sky News’s Dharshini David:

    #BHS stores to trade as usual, & staff remain in roles, for now.
    in a crafty move, gift vouchers will be accepted for up to 50% item value

    12.36pm BST

    The government is expected to make a statement on BHS’s fall into administration in the next few hours.

    It will either come from business secretary Sajid Javid, or small business minister Anna Soubry:

    Sajid Javid or Anna Soubry expected to make statement in parliament this afternoon on BHS

    12.35pm BST

    12.31pm BST

    BHS staff look downbeat as they walk in and out of the company’s HQ this lunchtime.

    Those approached by the Guardian refused to comment on the firm’s financial situation, as the administrators take control of the firm.

    12.18pm BST

    BREAKING: BHS has officially fallen into administration, and is now under the control of Duff & Phelps.

    Here’s the official statement, which confirms they will keep BHS stores open while they try to sell the group as a ‘going concern’.

    Philip Duffy and Benjamin Wiles, Managing Directors at Duff & Phelps have today been appointed Joint Administrators of BHS (The Group).

    The Group has been undergoing restructuring and, as has been widely reported, the shareholders have been in negotiations to find a buyer for the business. These negotiations have been unsuccessful. In addition property sales have not materialised as expected in both number and value. Consequently, as a result of a lower than expected cash balance, the Group is very unlikely to meet all contractual payments.

    Confirmed: BHS now officially in administration. Will continue trading and Duff & Phelps will try to sell as going concern

    12.13pm BST

    If you’re just tuning in, here’s our updated news story on the BHS crisis:

    BHS is going into administration after failing to agree a last-minute deal to rescue the department store chain.

    The collapse of the retailer, which employs 11,000 people, will be the biggest failure on the high street since the demise of Woolworths in 2008.

    Related: BHS heading for administration as rescue deal fails

    11.52am BST

    Sajid Javid, the Secretary of State for Business, Innovation & Skills, has tweeted that the government is doing its bit:

    Worrying news for #BHS workers this morning. Government is in close contact with the company's management at this difficult time

    11.48am BST

    Having bought BHS for just £1 last year, will Retail Acquisitions end up in profit despite administration?

    Key question for Dominic Chappell - have you made money from BHS over the last year despite its failure?

    11.44am BST

    Pension regulators could force former owner Sir Philip Green to help cover the BHS pensions black hole.

    Last month, the Mail on Sunday reported that they’re considering asking Sir Philip for at least £300m to cover the £571m pension black hole.

    Unacceptable face of capitalism: 11,000 BHS workers fear the axe and Philip Green buys a THIRD luxury yacht https://t.co/6denYFV9KN

    11.29am BST

    #BHS owner Dominic Chappell: "No one to blame.. combination of bad trading & not being able to raise enough money from property portfolio..

    11.22am BST

    Dr Gordon Fletcher of the University of Salford says BHS has failed to keep up with retail trends, or lose its image as a Baby Boomers store.

    The utilitarian model of retailing everything within one physical store simply does not appeal to younger generations and along with the soaring cost of servicing pensions the fate of this stalwart appears sealed.

    Being cheap, but not cheap enough to compete, coupled with being a landmark brand while not offering anything distinctive produces that particularly bland region of retailing that BHS has increasingly occupied.

    11.08am BST

    Mrs Condon from Camden has emerged from BHS’s Oxford Street store carrying bulging bags.

    “I love that store. We don’t go down here very often, but I’ve always loved BHS. It’s got a variety of things, whatever you need it’s there for you.”

    “I wanted some cushions, some bath towels, sheets and bits and bobs you don’t need to know about.”

    10.49am BST

    Back on Oxford Street, Louise Simpson, 40, from Wakefield is passing time with her dad, Bill Hardy, while her daughter had an interview for a place at Rada, the nearby performing arts college.

    She emerged from BHS with shopping bags bulging with new living room cushions.

    “I think it’s quite a sad day to be honest.”

    “When you go in there there’s not many people walking around buying stuff. Back to the old saying: people haven’t got the money.”

    “To be honest it’s internet shopping for me. It’s age. Parents will probably just keep shopping around but we will just Google it. I think the Internet has got a lot to say for a lot of shops (which are closing down). Probably won’t be the last either.”

    “It’s a shame to think that they are going under considering how long they have been going.”

    10.46am BST

    Jon Copestake, retail analyst at the Economist Intelligence Unit, says BHS’s current owners have not performed well:

    Having purchased the retail chain for just £1 [in March 2015], Retail Acquisitions has shown little appetite or acumen for retail management, despite its name.

    Its owner Dominic Chappelle is a former racing driver with more experience of bankruptcy than retail. In addition to his hefty salary he has been involved in a number of questionable transactions, such as reportedly diverting funds borrowed by BHS to its directors while pushing landlords to accept rent reductions.

    10.37am BST

    Guardian Witness would like to hear from BHS staff, and from former workers worries about their pension:

    Related: How might you be affected by the administration of BHS?

    10.34am BST

    Retail commentator Paul Mitchell sees more trouble ahead:

    BHS & Austin Reed to enter administration and Beales CVA unraveling. There's been a calm before the storm and expect it to worsen.

    10.27am BST

    A 66-year-old woman from St. John’s Wood, who declined to give her name, said she always gets her clothes from BHS.

    “I’m so upset!” She exclaimed when Damien asked about the shops financial troubles.

    “The prices are reasonable and I just like it. Marks and Spencer are too upmarket now, all it is is business suits and business blouses and they are totally out of touch with people like me.

    “I’ve just bought a swimming costume the other week. It’s £28 in here and £35 in Marks, and I got 25% off so it came down to about £10 difference. It’s things like that.

    “I think it’s a real, real shame because to me John Lewis and Debenhams are too expensive now. Primark’s quality is not that great, plus they are more for the younger generation.

    There’s not many shops now that cater for the older woman.”

    10.16am BST

    BHS’s owner has confirmed that the administrators have arrived, reports Ben Martin of the Telegraph:

    BHS owner Dominic Chappell has just told me that Duff & Phelps are in the retailer's head office now #bhs

    10.12am BST

    The press are gathering on Oxford Street....

    TV crews hard at work outside #BHS. But not much drama here! pic.twitter.com/d7yVyD1uv1

    10.12am BST

    This is why BHS has struggled to find new funding:

    Behind BHS's funding problems is underperforming stores. Sales targets all missed in last year. Source close to BHS said market "horrific"

    10.09am BST

    Andri Antoniades, 59, from Cyprus, and her husband are browsing the Oxford Street shops during a holiday to London.

    They already know about BHS’s problems. And speaking to Damien Gayle, they raised the topic of Philip Green’s £1.2bn dividend [from his Arcadia empire in 2005] and his subsequent sale of the business for £1 last year.

    “It doesn’t look good and this is what happens at the end of the day.

    He brought in a famous model [Caprice] he was trying to upmarket the look, but obviously it’s gone a bit wrong.”

    “We’ve just come to see it before it collapsed!”

    “It’s nice to be able to say I was there...”

    10.01am BST

    Nicolette Kadzeya, 39, was waiting with her three children outside BHS’s store on Oxford Street when it opened.

    She believes the company has failed to keep pace with the changing times, my colleague Damien Gayle reports:

    Kadzeya had read about the firms’s problems but hoped it would open because she had to exchange an unwanted item

    “I think the problem with BHS is that this branch is very up to date but if you go to the branch in Surrey Quays it’s as if you have gone back in time. It’s like you’ve gone back to the mid-90s.

    “I think they are open so I have to make it fast,” Kadzeya said as she wheeled her buggy inside.

    9.55am BST

    BHS’s store in Oxford Street doesn’t look terribly busy, but at least it’s open for business this morning:

    #BHS is open on Oxford street. pic.twitter.com/gDH2yIwSQW

    9.49am BST

    A BHS spokesperson has confirmed that the administration process is underway:

    #BHS confirms to journalists outside its HQ that it is going into administration. Process has begun. @itvnews pic.twitter.com/Bm7zGjmEqM

    9.25am BST

    BHS’s social media team are doing their best to remain upbeat today, and ready to help:

    Good morning! It's another busy day here at BHS. We will be here till 11pm tonight to answer everyones questions. Have a nice day ☺.

    @BHS_UK fingers crossed for you all today x

    @BHS_UK Sorry to hear this morning's bad news. Best wishes to all the staff.

    9.14am BST

    We’re expecting BHS to file for administration as soon as the UK courts are open for business:

    Barring late miracles, BHS will file for administration once courts open at 10. Staff then told,and that they will be paid on Fri as planned

    9.08am BST

    Newsflash: German business confidence is weaker than expected, according to the latest survey from the IFO thinktank.

    IFO’s business confidence reading has dipped to 106.6, from 106.7 last month, with firms reporting that conditions have become tougher.

    *GERMAN APRIL IFO CONFIDENCE AT 106.6; MEDIAN FORECAST 107.1

    German IFO data disappoints #eur

    9.03am BST

    Anyone holding BHS gift vouchers should spend them right now, says Alex Neill, head of campaigns at consumer group Which.

    She points out that administrators are not obliged to accept gift vouchers - even though the company has already received the monay for them.

    When a company goes into administration the administrators get certain powers to help turn the company around.

    These powers enable them to refuse to accept vouchers if they consider this is in the best interests of the company.

    Get down to the shops today if you have #BHS gift vouchers https://t.co/9NNpzvHxFm

    8.54am BST

    The crisis at BHS highlights wider problems in the retail sector , argues Joe Rundle, head of trading at ETX Capital.

    It’s not just BHS that’s suffering - shares are down sector-wide over the last 12 months – reflecting investor caution about an industry that’s increasingly dependent on cheap credit and little else to drive it.

    The concern is that if interest rates rise – which they will have to do sooner or later - consumers will quickly tighten their belts and dispense with their credit cards.

    Austin Reed files notice for administration with 1,000 jobs at riskhttps://t.co/tMvgCCpKFy #fashionnews via @BoF @guardian

    8.42am BST

    BHS staff are due to learn at 11am that their jobs are at “very high risk” after efforts to create a rescue deal over the weekend failed, says the BBS’s Simon Jack.

    Administrators Duff & Phelps are lined up to take control, and will try to sell BHS as a going concern. That will be tough, though, as the company needs £100m of fresh funding.

    8.32am BST

    BHS is paying the price for not keeping track with its customers’ changing needs, says Phil Dorrell, Partner, Retail Remedy retail consultants.

    Dorrell agrees that the company’s better stores will be ‘cherry-picked’:

    When the administrators are called in, there won’t be a retailer to buy BHS wholesale.

    Expect a piecemeal sale of specific sites in strategic locations to John Lewis possibly or Sports Direct or Next.

    8.23am BST

    BHS can trace its history back to 1928, when it was created as a British rival to Woolworths.

    It floated five years later, spending 65 years on the stock market until retail magnate Philip Green took it over in 2000.

    Related: How Britain fell out of love with BHS - timeline

    8.08am BST

    Nick Hood adds that BHS’s profitable stores will probably cherry-picked, perhaps by Sports Direct.

    That would save some jobs, but as he tells the Today Programme:

    Ultimately, we’ve got 11,000 jobs at risk here and the pensions of 20,000 people. It’s a disaster.

    The initial offer I believe Sir Philip made of £40m, plus a £40m loan on top, won’t cut the mustard.

    Inevitably, a much higher contribution will be required.

    7.53am BST

    BHS’s options are “distinctly limited” as it totters on the brink of administration, warns Nick Hood, business risk adviser at the insolvency practitioners Opus.

    Speaking on the Today Programe, Hood says BHS has suffered from years of serious underinvestment, and lost over £400m over the last six years.

    Retail these days is all about heavy investment in staying up with the trend, online offerings, mobile offerings. None of this has happened at BHS.

    This has awful exchoes of what you and I were discussing in 2008 over the demise of Woolworths. Another retail business that hasn’t stayed up with the times.

    7.41am BST

    One of Britain’s longest-running retail chains is on the brink of collapse.

    BHS has failed to secure emergency funding that it needed to pay wages and its rent. The restructuring firm Duff & Phelps is set to be appointed as administrators on Monday, unless £60m can be found to keep BHS afloat in the short term.

    Darren Topp, the chief executive of BHS, said: “What was on the table wasn’t sufficient and we have been working in the last few days to fill the gap.”

    Related: BHS seeks Sports Direct lifeline as it heads for collapse

    7.33am BST

    The pound has hit its highest level since early March this morning, after President Barack Obama made his dramatic intervention into the EU referendum debate.

    The Obama effect...£ rallies as US President tells UK to stick in EU & warns of decade to renegotiate a trade deal pic.twitter.com/Y0QlF08mJY

    Related: Hillary Clinton urges Britain to remain in the European Union

    The pound was among one of the best performing currencies last week and has continued to rally this morning against the US dollar and euro as markets perceive that the recent intervention by US President Obama, as well as his possible successor Hillary Clinton has shifted the odds towards the “Stay “ camp in the latest polling indicators, dealing a blow to “Brexit” campaigners.

    7.17am BST

    Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

    Traders are bracing for a busy week, with new growth data from Britain (on Wednesday), the US (Thursday) and the eurozone (on Friday).

    Our European opening calls:$FTSE 6305 down 6
    $DAX 10381 up 8
    $CAC 4572 up 2$IBEX 9249 up 16$MIB 18701 up 14

    Continue reading...
     

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