Bleak future for staff after BHS collapse

The department store chain's collapse is the biggest retail failure suffered in Britain since Woolworths went bust in 2008, and leaves staff no clearer on their futures.

The move places 164 stores under threat, including Shropshire's only branch, in Telford Shopping Centre. There are other outlets nearby in Wrexham and Wolverhampton.

Customers remaining loyal to BHS expressed sadness at its slide into administration – and nostalgia for its heyday as the "go-to" shop for everything from lighting and linens to wedding gowns.

Although footfall appeared to be holding up well at BHS outlets in Telford and Birmingham, some shoppers claimed the stores were busier than usual – possibly due to media coverage of the chain's failure to find a buyer.

Bargain-hunters visiting the BHS branches in Telford and at New Street, Birmingham, offered various theories to explain its fall from favour, with one woman blaming the colours in its ranges, and another saying in-store concessions had undermined its brand.

Michael Smith, 66, was in Telford shopping with his wife and daughter. The pensioner, from Wolverhampton, said: "It's happening to all the stores – the online shopping is taking over everything. Nothing comes as a surprise nowadays. It's just a case of the fittest are the fittest and they survive."

Lisa Brindley, a 47-year-old drug support worker from Newport, said she bought bridesmaid dresses from BHS in November 2014. She said: "I think the whole wedding range is elegant but affordable, we had to find dresses six weeks before the wedding and luckily BHS came to the rescue. It's a shame they're closing, but I'm not surprised. There's so much competition now."

Birmingham New Street shopper Paulette Francis-Green, in her late 50s, said: "It's sad news and I just hope that the staff are treated well and that Sports Direct can take it on or do something with it."

Claiming that BHS had hosted too many concessions for outside brands, the freelance project manager added: "The BHS brand is not up there any more.

"It has not kept up with changes in how people buy goods."

Another Birmingham shopper, Peta Goodman, claimed BHS's management had "lost the plot".

The 67-year-old said: "I suspect it's just the competition of people being able to buy things online – click-and-collect and easy returns. And dare I say it, the colours are not right. I am trying to think of the last thing I bought there – it would probably be a toilet brush six months ago."

Administrators Duff & Phelps say they want to sell the business as a going concern, and BHS continues to trade in the wake of the collapse into administration yesterday.

But retail experts have warned that it is "unlikely" a buyer will be found in its current form, and about 30 retailers – including Sports Direct – may look to either buy a slimmed-down version of the business out of administration, or to pick over its store estate.

In a statement, the administrators said: "The group (BHS) 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. The directors therefore have no alternative but to put the group into administration to protect it for creditors. The group will continue to trade as usual while administrators seek to sell it as a going concern."

The company's owner Dominic Chappell said he will continue to work with the administrators to "find a solution post the administration".

Mr Chappell said: "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."

BHS was bought last year by a consortium called Retail Acquisitions, headed by Mr Chappell, for £1 from retail entrepreneur Sir Philip Green, the owner of the Arcadia retail empire. BHS has debts of more than £1.3 billion, including a pension fund deficit of £571 million, which proved a major stumbling block in last-ditch rescue talks over the weekend.

Rival retailer Sports Direct is understood to want to some of BHS's 164 stores, but will only do so if it does not have to take on any pension liabilities. Sir Philip is reported to have offered £80 million towards the cost of BHS pensions, though the regulator could still pursue further payment from the retail billionaire. Sir Philip bought BHS for £200 million in 2000.

Julie Palmer, partner at insolvency firm Begbies Traynor, said: "As an under-performing brand that simply hasn't kept up with the pace of change in the retail sector and requires major investment, it looks increasingly unlikely that any buyer will be brave enough to salvage the business in anything like its current form."

John Hannett, general secretary of the shopworkers' union Usdaw, said: "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 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."

A line of staff filed into BHS's headquarters in Marylebone Road, central London, shortly before 11am. They emerged about 20 minutes later and walked into an adjacent office building belonging to the firm. One staff member later confirmed they had been spoken to about the situation, but added that she could not elaborate on what they were told.