Struggling British department stores group BHS is expected to go into administration, possibly as early as Monday, two sources with knowledge of the company’s plans told Reuters on Sunday.
Administration, a form of creditor protection, would endanger nearly 8,000 jobs and another 3,000 contractors working with the 88-year-old firm, which has 164 stores.
If BHS does go into administration it would be Britain’s most high profile high street collapse since mobile phone retailer Phones4U in September 2014.
BHS, hit hard by intense competition in the UK retail sector, had in March won the support of its creditors for a rescue plan that gave the group big cuts in its rent bill.
However, BHS has since failed to raise the additional funds it required, particularly from planned asset sales.
The stores group was acquired for one pound in March 2015 by Retail Acquisitions, a collection of little known investors, from billionaire Topshop owner Philip Green.
Green had bought it for 200 million pounds ($290 million) in 2000.
One of the sources with knowledge of BHS’s plans said last gasp talks with Sports Direct, Britain’s biggest sportswear retailer, to engineer a rescue were unlikely to succeed, making administration inevitable.
Administration would mean BHS’s pension deficit, reportedly some 571 million pounds ($824 million), being bailed out by the government-backed Pension Protection Fund (PPF).
British shopworkers’ union Usdaw said it was very concerned about the situation at BHS.
“We are seeking urgent clarification from the company and urging them to change their attitude to trade unions and begin a dialogue with us at this difficult and worrying time for staff,” said Usdaw national officer David Gill.
BHS declined to comment. Sports Direct could not be immediately reached for comment.