BHS creditors and landlords approve of CVA proposals

Struggling British department store group BHS has been saved - for now - as over 95 percent of its creditors and landlords voted in favour of a restructuring deal to cut its store rent for a number of the retailer's 164 UK locations earlier today. BHS needed 75 percent of its creditors to approve of its proposals for a company voluntary agreement (CVA) which secures the short-term future of BHS's 10,000 employees.

The CVA proposals will see landlords cutting rent at 87 of BHS 164 stores, although as many as 40 of BHS least profitable stores could still be closed over the next few months if an agreement concerning the amount of rent reduction is not met with property owners. The group requested to keep the rent at 77 stores unchanged, but asked to pay on a monthly basis, rather than a quarterly basis.

A separate vote, for the remaining 23 stores which are held in a separate holding company, is set to take place this afternoon. BHS's owners Retail Acquisitions first submitted their proposals for the CVA to the high court on March 3, which ask landlords for 40 loss-making stores to cut rents by 75 percent, in addition to asking for a 20 percent or 50 percent rent cut on 47 stores to keep its business afloat.