BhS Chain In Talks To Secure New Cash Boost

BhS, the department store chain previously owned by Sir Philip Green, is in talks to secure a fresh cash boost as it enters the crucial Christmas trading period.

Sky News has learnt that BhS, which was acquired by little-known vehicle Retail Acquisitions in March for £1, is in the early stages of negotiating a deal to borrow millions of pounds, using the chain's inventory as collateral.

Sources said on Wednesday that the retailer was in discussions with a company called Gordon Brothers and a number of other third parties about an agreement, although they cautioned that finalising a deal could take some time.

Such an arrangement to borrow against stock - known as asset-based financing - is common in the retail sector.

The consideration of a deal comes as BhS enters its first Christmas trading period under new ownership and less than two months after BhS struck a deal with Grovepoint Capital to provide £65m in new funding, secured against a small number of the department store chain's outlets.

With (Other OTC: WWTH - news) more than 170 stores across the country, BhS remains one of the most prominent brands on British high streets.

Since Sir Philip sold the business earlier this year, its new owners have sold a number of shops and are reported to be considering offloading its flagship Oxford Street site in Central London.

BhS's owners declined to comment on the latest talks, but in a statement in August ahead of its deal with Grovepoint, a spokesman for Retail Acquisitions said:

"We have said all along that we would refinance to help accelerate the turnaround plan for the UK business.

"Every penny raised will support the regeneration of our portfolio of stores, returning this iconic British brand to its rightful place on the high street.

"We are excited about the future and are pleased that major financial companies share our optimism.‎"

Darren Topp, BhS's chief executive, said earlier this year that trading had been ahead of management's expectations since the takeover‎, although many fashion and homewares retailers have been complaining about a brutal high street environment.

Sir Philip, who owns the Arcadia fashion empire whose brands include Dorothy Perkins and Top Shop, brought 15 years of ownership at BhS to an end when he offloaded the business.

Documents subsequently emerged showing that the Monaco-based billionaire continued to have a financial exposure to BhS in the form of a £40m loan to the company.

Little was known about the protagonists behind BhS's new owner: while they included a former racing driver, solicitor and stockbroker, they boasted little experience of retailing.

Under the new regime, Mr Topp has decided to push more aggressively into food sales despite the difficult conditions facing much larger rivals.

He has signed a deal with Booker to supply BhS's convenience food offering, and struck agreements with Claire's Accessories, Compass Group (Other OTC: CMPGF - news) and Debenhams (Other OTC: DBHSF - news) to bolster other areas of the department store group's offering.