epa05254656 A view of BHS department store in Hull, Britain, 11 June 2015. Hull is destined to be the UK City of Culture 2017. EPA/MAURITZ ANTIN
The search for a buyer for BHS has focused on less established retail buyers © EPA

BHS administrators are scrambling to find a buyer among a dwindling band of credible bidders, after several of Britain’s wealthiest high street tycoons stepped away from the talks.

Waning interest from established retailers including Mike Ashley, founder of Sports Direct, and John Hargreaves, founder of the Matalan discount clothing chain, has focused attention on buyers that do not have a significant presence on the UK high street.

Greg Tufnell, who led Mothercare for three years in the 1990s and has since been involved in a series of smaller retail ventures, was on Tuesday named as a possible buyer for the collapsed department store chain.

Unlike other possible buyers, who could draw on personal wealth or bid through companies they control, Mr Tufnell was said to be working with third-party financial backers, whose identities have not been disclosed.

Between 2002 and 2006 Mr Tufnell was chief executive of Marchpole, a listed brand licensing company that collapsed in value and was suspended from the stock exchange two years after his departure.

Duff & Phelps, the administrators of BHS, have indicated that any purchaser must take over the entire store estate, which includes some prime locations but also about 40 stores whose viability BHS considered doubtful even at steeply reduced rents.

Several property agents with experience of handling the affairs of collapsed retailers were sceptical that a sale of the entire estate could be agreed.

They added that negotiations were likely to focus on how many undesirable stores a bidder would have to take on, with buyers resisting the administrators’ efforts to sell as many as possible. Buyers do not want to take on underperforming stores and have to pay the costs of shutting them down.

Mr Ashley had aimed to rescue all 164 BHS stores and the collapsed retailer’s 11,000 employees but has been outbid. Talks with Mr Hargreaves, who was named as a BHS bidder last week, were said to have made little progress.

BHS is widely seen as a troubled business, and retail property experts said the most likely buyer would be a growing retailer keen to replace tatty stores with outlets under its own brand.

Insolvency rules give the administrators until mid-June to make a proposal to creditors, who could appoint liquidators to sell the assets piecemeal if a buyer for the business cannot be found.

“That would leave the high street looking gap-toothed, just like after Woolworths,” one prominent retailer said, referring to the high street chain that collapsed in 2008. “It took years to put tenants into all those stores.”

But the administrators could also seek to avoid a liquidation by accepting lower offers or a partial sale of the business. Several people said that, if the administrators relaxed their criteria, some retail heavyweights who have walked away from the talks could be drawn back in.

The collapse of BHS is one of the most contentious corporate failures in recent years. The company leaves behind a pension deficit that will be absorbed by an official rescue fund at an estimated cost of £275m, prompting two parliamentary investigations.

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