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By Paul Sandle
LONDON, June 2 (Reuters) - British department stores groupBHS is to be wound down after administrators failed to find abuyer for the 88-year-old chain, threatening over 10,000 jobsand creating huge vacant sites in town centres struggling tocope with changing shopping habits.
The failure to find a buyer will likely increase the focuson previous owner, billionaire Philip Green, who sold the chainto a group of little-known investors led by a previous bankruptcalled Dominic Chappell for one pound in March 2015.
All of BHS's 163 stores will hold closing-down sales overcoming weeks and 8,000 staff are likely to be laid off, advisersDuff & Phelps said on Thursday. Another 3,000 workers notdirectly employed by BHS are also at risk.
The chain, which once targeted a similar mid-market customeras bigger rival Mark & Spencer, failed to keep pace withchanges including the rise of cheaper, more fashionable storeslike Primark (part of AB Foods ) and online competition.
"The British high street is changing and in these turbulenttimes for retailers, BHS has fallen as another victim of theseismic shifts we are seeing," said administrator Philip Duffyafter BHS became the latest casualty of a tough market whichalready this week claimed tailoring chain Austin Reed.
Its closure, one of the biggest failures in the UK retailsector since Woolworths in 2008, came after none of the multipleoffers for the business were able to complete a deal due to theworking capital required to secure the company's future,administrators added.
Up to 10 bidders were reported to have been interested inrescuing the stores, including Mike Ashley, owner of SportsDirect, who had said he was in talks beforeadministrators were called in.
PENSION DEFICIT
Green had paid 200 million pounds ($289 million) for BHS in2000, and he took about 400 million pounds in dividends in theearly years of ownership, according to company accounts.
But the business had been loss-making for seven years whenit was sold and it has a deficit in its pension fund of morethan 500 million pounds.
"Sir Philip is saddened and disappointed by the news and hadhoped that the business would be sold as a going concern," aspokesman said.
The British government said the failure to rescue thebusiness was devastating news for all those that work at BHS.
Business Minister Anna Soubry said the government hadalready announced an accelerated Insolvency Serviceinvestigation into the activity of former BHS directors.
"Any issues of misconduct will be taken extremelyseriously," Soubry said.
The pensions regulator is also investigating whetherGreen's Arcadia Group sought to avoid its responsibilities inthe deal, and should be pursued for a contribution to make goodBHS's 571 million pound pension deficit.
Green is also due to be questioned on June 15 by Britishlegislators on the Work & Pensions and Business Committees. "Thestaff will want answers about how things went so badly wrong onhis watch," the opposition Labour party said in a statement.
Chappell is also set to be interviewed by the same jointcommittee.($1 = 0.6921 pounds) (Editing by Kate Holton and David Holmes)
