The collapse of BHS was “avoidable”, says former owner Mark Chappell.
In an explosive briefing with MPs, the former bankrupt property tycoon said the Arcadia boss Sir Philip Green:
- Went “insane and shouted down the phone” when hearing “credible buyer” Mike Ashley, owner of retail giant Sports Direct, was interested in buying BHS
- Threatened to back out of the deal if Chappell met with The Pensions Regulator
- “Hurried” the deal through with Retail Acquisitions and missed out on six weeks of due diligence as he had “mentally got rid of the business”.
Chappell – who admitted to Green “he knew nothing about retail” – bought BHS in 2015 for £1. It is currently losing around £1.5 million a week. He is now considering whether he has a legal case against Arcadia and Green.
“Arcadia had a duty of care to us and the employees – if we had the assistance from Acadia we could have turned the business around,” said Chappell.
“I think Philip genuinely thought we would fail.”
Chappell said the pensions furore “killed” BHS and that a deal with Sports Direct’s Ashley would have “safeguarded stores and jobs”.
“I rang up Mike Ashley and said I would give him my shares if he would please help us – he was willing but Green railroaded us out if working together,” he said.
The collapse of BHS has put 11,000 jobs at risk and a £551 pension pot in jeopardy, yet Chappell admitted he will stand to make a profit from the purchase – something he said is “completely fair” thanks to his work “day and night, 24 hours a day”.
Chappell refused to give details on how much money he stood to make from the deal and how much money he had taken out of BHS when pushed by MPs.
The business select committee heard Green offered a property to Chappell’s company Retail Acquisitions, which sold for £35 million, effectively creating a buyer for the troubled retail chain.
Chappell said the original deal to buy BHS put on the table by Green was one that was pension free and debt free.
“After the pension turnaround by Green, I was going to pull out of the deal. However, Deloitte had told me a tentative plan costing £50m to take care of the pension fund had been agreed with the regulator,” said Chappell.
Chappell told MPs Green blocked a meeting with The Pensions Regulator, threatening to stop the deal if any such meet took place.
BHS’ former owner blasted the current Pensions Minister Ros Altman for failing to help Chappell with BHS’ pension fund crisis, claiming she was “too conflicted to help”. He accused her of cancelling several arranged meetings.
MPs called Chappell’s cash flow into question after he admitted BHS needed “around £60m to £80m” to turn it around despite only having around £24k to draw upon with numerous “cash pinches” putting pressure on operations.
Chappell said he was ultimately responsible as BHS’ major shareholder for its demise and offered an apology to BHS workers.