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Department store chain BHS secures £65m loan for turnaround plan

Published 14 September 2015

UK-based department store chain British Home Stores (BHS) has secured loan of £65m from London-based investment group Govepoint to implement its three-year turnaround plan.

BHS

The loan was secured against 10 of its stores.

The latest development comes six months after the chain was sold to Retail Acquisitions, which is led by former racing car driver Dominic Chappell.

The loan would be utilized for turnaround plan rather than paying the rent bill. At the end of this month, BHS has to pay a quarterly rent bill, reported The Financial Times.

After paying the rents and meeting other financial obligations, BHS would still have a working capital of more than £85m, reported the financial daily, citing sources.

Over the next three years, BHS plans to renovate its stores. These would include changing the frontages, store windows and display themes, rebranding BHS to British Home Stores, and introduction of food counters in at least 20 of its 170 UK stores by the end of 2015.

BHS also plans expansion of its online business and improve its distribution facilities. Some of the funds could also be used for renegotiating leases on outlets where it has excess space.

Later this week, BHS is set to launch in-store cafe called The Lounge Coffee Shop at its store in Watford.

Six months ago, Sir Philip Greene sold the underperforming chain. He wrote off £200m of loans from his Arcadia retail conglomerate to BHS in April, according to Companies House documents.


Image: BHS plans revamp with new loan amount. Photo: Courtesy of Mtaylor848/ Wikipedia.