A black hole of more than £1.5billion has opened in the pension schemes of some of Britain’s biggest High Street chains.
As beleaguered retailers shut stores and slash tens of thousands of jobs, analysis by the Mail shows how they are also struggling to fund the retirement plans of their staff.
Household names including John Lewis, Dixons Carphone, Mothercare, Carpetright and Topshop owner Arcadia are nursing shortfalls in their pension schemes.
The revelations come two years after BHS went bust with the loss of 11,000 jobs and a £571million black hole in its pension fund.
Pensions threat: Household names including John Lewis and Topshop owner Arcadia are nursing shortfalls in their pension schemes
Tom Selby, a senior analyst at investments company AJ Bell, said: ‘Pension deficits are adding insult to an already injured High Street.’
Former BHS owner Sir Philip Green faced a fierce backlash over the collapse of the chain just a year after he sold it for £1 to a bankrupt businessman.
After months of criticism the rag trade tycoon eventually agreed to plug the gap in the pension scheme with a £363million cheque.
But his Arcadia group, which owns Topshop, Topman, Miss Selfridge, Burton, Dorothy Perkins and Evans, has a pension black hole of £300million, according to the latest accounts. Arcadia is not alone, however.
House of Fraser Threat
The future of House of Fraser has been thrown into fresh doubt after landlords launched a legal challenge against its store closure programme.
The retailer has been trying to push through the closure of 31 of its 59 stores through a Company Voluntary Arrangement, a form of rescue deal that will also see rents at another ten stores cut by 25 per cent.
But landlords are challenging the plan in the courts, saying they have been treated unfairly.
If the plan collapses, House of Fraser could fall into administration.
The John Lewis Partnership, which owns the department store chain as well as Waitrose, has a deficit of £731million in its pension scheme.
The group has launched a review of the situation as it battles to safeguard the retirements of the 63,000 members in the plan.
It is another headache for John Lewis bosses, who warned last month that profits in the first half of the year would be near zero.
Dixons Carphonewhich owns Currys and PC World, has also seen an enormous black hole open up in its pension scheme. Latest company data shows it has a deficit of £470million.
The firm has seen profits tumble as customers hang on to their old mobile phones rather than fork out for expensive new handsets. It is closing 92 Carphone Warehouse stores.
Dixons Carphonewhich owns Currys and PC World, has also seen an enormous black hole open up in its pension scheme. Latest company data shows it has a deficit of £470m
Mothercare has a pension deficit of £37.7million. The struggling chain has seen its stock market value plunge by more than 95 per cent since the turn of the decade.
It is planning to close 60 stores by next summer, putting 900 jobs at risk. Carpetright, which last month posted an annual loss of £70.5million, has an £800,000 shortfall in its scheme.
Laith Khalaf, senior analyst at Hargreaves Lansdown, said: ‘The High Street has got enough problems without pension deficits casting a cloud over the fortunes of the retail sector.
‘The good news is these black holes can be closed over a number of years, and rising interest rates should help to deflate the problem, albeit quite slowly.’
The pension schemes of other major High Street chains are in rude health, however. Marks & Spencer’s scheme has a surplus of nearly £950million while the Next scheme is £106million in the black.