The collapse of BHS became a battleground during a Parliamentary hearing, as former bosses of the company pointed fingers and made jaw-dropping allegations over the events leading to its demise.
Dominic Chappell, who bought BHS from Sir Philip Green for £1 in March 2015, was accused of threatening to kill his former chief executive for challenging a transfer of £1.5mday out of the company.
Mr Chappell laid blame on Sir Philip for plunging BHS into administration rather than allowing it to be sold to the disgraced Sports Direct founder Mike Ashley.
MPs on the Business, Innovation and Skills Committee spent hours with witnesses picking apart wildly different accounts of how BHS collapsed within a year of being sold, putting 11,000 jobs at risk.
Darren Topp, former BHS chief executive, was asked about a £1.5m transfer Mr Chappell made from BHS to an unaffiliated company called BHS Sweden in April. Mr Topp said that when he phoned Mr Chappell to question him about the transfer, Mr Chappell threatened to kill him, saying: “If you kick off about it I’m going to come down there and kill you.”
Mr Chappell said the money was to “look after the home team”. He also told Mr Topp that he had formerly been in the SAS and owned a gun.
The money was later recovered save for £50,000 in fees. Mr Topp said he thought the money had been completely recovered.
During the session with former bosses of BHS, Mr Chappell was branded a “Premier League liar” with his “fingers in the till”. Michael Hitchcock, a former financial adviser to BHS, said Mr Chappell was “a Sunday pub league retailer, at best.”
“So many people believed him, but he was a liar,” Mr Hitchcock said. Mr Hitchcock was hired by Mr Topp to look into finances at the firm after he grew suspicious about Mr Chappell’s handling of the company’s affairs.
Asked why he thought Mr Chappell was a liar, Mr Hitchcock said he didn’t put in the money he had promised to when he bought BHS from Sir Philip.
Mr Hitchcock said Retail Acquisitions Limited, the company Mr Chappell used for the BHS takeover, put £10m into the business and took £17m out of it.
This put BHS at risk despite Sir Philip leaving its balance sheet “stacked for the value” at the time of the sale. “On the balance sheet I saw there was enough value that if leveraged correctly you could give the business a much better chance than Chappell allowed,” Mr Hitchcock said.
But in his extraordinary testimony to MPs, Mr Chappell said Sir Philip was aware that he knew nothing about retail.
“I think Philip genuinely thought we would fail, but he sold it to us nevertheless,” Mr Chappell said.
Chappell said he inherited stores that been slipping further into disrepair for decades.
“For the past 10 years, there had been little or no investment in the stores,” he said. “Some shops had no heating. Staff came in to paint, to replace lights because no one had invested in it for years.”
Mr Chappell said that when the business was going under, he phoned Sports Direct founder Mike Ashley and offered him his shares in exchange for BHS. Mr Ashley was willing to do it, Mr Chappell said, until the plan was derailed by Sir Philip.
Mr Ashley said that he “100 per cent wanted to buy BHS” at a separate hearing on working practices at Sports Direct on Tuesday.
“I would have loved to have bought it,” Mike Ashley said. “BHS is logical, it’s also logical we could have offered extreme value, Sports Direct upstairs and BHS downstairs. I’m not saying I’m a saint, but we could have got synergies.”
He added: “Please don’t ask me any more questions or I’ll get shot.”
Mr Chappell admitted that he had made a profit off BHS despite its collapse, but he would not say how much.
Some 11,000 jobs will go after administrators failed to find a buyer for the British retailer, leaving gaping holes on high streets around the country.
All of the 163 BHS stores in the UK will hold closing down sales in the coming weeks, marking one of the biggest failures in UK retail since Woolworths closed in 2008.
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