The owner of BHS was trying to buy struggling tailor Austin Reed just a month before the department store collapsed, according to new documents published as part of the Parliamentary inquiry into the collapse.
A letter to MPs from Alan Jacobs, a retail professional who intermittently advised BHS buyer Dominic Chappell, claims Chappell was in discussions with the “management team of Austin Reed Group and its advisers between January and March 2016 regarding the possibility of Retail Acquisitions or an associated vehicle taking control of Austin Reed Group.”
It means Chappell was holding takeover talks just weeks before BHS collapsed. The department store went into administration in April, putting 11,000 jobs at risk.
Jacobs, who was a non-executive director of Austin Reed, says Chappell first contacted him about the possibility of taking over Austin Reed in October 2015. But Jacobs writes in his letter to MPs that takeover talks stalled after “it became clear that Mr Chappell and Retail Acquisitions did not have access to sufficient funds to conclude such a transaction.”
Retail Acquisitions Ltd is the vehicle that brought BHS for £1 last year from retail billionaire Sir Philip Green’s Arcadia Group. Retail Acquisitions Ltd is majority owned by Dominic Chappell, a twice bankrupt former racing driver who had no former retail experience prior to the BHS takeover.
MPs have already heard that Chappell saw the acquisition of BHS as a stepping stone to building a larger retail business. Cornhill Capital’s Andrew Frangos told MPs Chappell talked about acquiring “a Swiss retailer” and “a small UK retailer.”
An early financing contract from Cornhill Capital suggested Chappell could even go on to takeover Arcadia, although Chappell has since denied this to MPs.
Austin Reed was in financial difficulty at the time of Chappell’s interest and went into administration shortly after BHS.
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