Employee Engagement

A business leader has accused the former owners of BHS of “lamentable failures”, saying its collapse has fuelled public distrust of UK plc. Simon Walker, head of the Institute of Directors (IoD), told the BBC that Sir Philip Green had a moral responsibility to the retailer’s staff.

The IoD normally promotes the cause of business, but Mr Walker said there were still many unanswered questions.

Sir Philip is due to give his side of the story to MPs this week. It was announced on Thursday that the department store will be wound down with the loss of up to 11,000 jobs after efforts to find a buyer failed.

Mr Walker told the BBC’s Today programme that the collapse of BHS “has the potential to be deeply damaging to the reputation of British business”.

He said: “We spend a lot of time agonising about the loss of trust in the business community, and I think we can see why this is. I think there is a lamentable failure of behaviour and there are a lot of questions that need to be asked.”

Asked if he could defend Sir Philip’s handling of the company, Mr Walker replied: “No, I can’t.”

Sir Philip, he said, has “moral responsibilities” over the demise of the firm and plight of the pension scheme.

The billionaire owner of the Arcadia retail empire has been accused of taking money out of BHS while the pension fund sank deep into deficit.

Mr Walker said: “You can’t just get yourself off the hook by selling a business to someone who’s been bankrupt three times and is a former racing driver with no retail experience.”

He acknowledged that “BHS was probably going to fail anyway”, but added: “It’s the manner of its failure and the fact that it ends up dumping huge liabilities on to the taxpayer that is a problem, and it is the lack of due diligence in selling it (to Mr Chappell)… something’s wrong”.

Two Commons select committees are holding hearings into the demise of BHS, and Sir Philip, Mr Chappell and other directors are due to give evidence later this month.

Sir Philip said on Thursday that he was “saddened and disappointed” by the biggest retail collapse since Woolworths in 2008. A spokesman said the owner of the Topshop chain had hoped to see the company sold as a going concern.

BHS’s administrators Duff & Phelps said on Thursday that they had failed to find a buyer and that all 163 stores would be holding closing sales over the coming weeks.

The jobs of 8,000 members of staff are likely to go, while a further 3,000 jobs of non-BHS employees who work in the stores may also be at risk.

John Hannett, of the retail union Usdaw, said there were “serious questions about how we got to this position”.

He told the BBC: “There are serious questions about the pension deficit, serious questions about why they [Duff & Phelps] were not able to find a successful business owner when we know a number [of potential buyers] expressed an interest. So we need to unravel how we got to this situation.”

Duff & Phelps blamed “seismic shifts” in the retail sector for the collapse of the chain.

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