The loss-making UK retailer British Home Stores (BHS) has run out of money to pay wages and rent and has been put into administration.
Unless a new buyer can be found 11,000 jobs are likely be lost.
There are 8,000 people working directly in its 164 department stores plus another 3,000 contractors.
Some shoppers were surprised, others not.
One woman said: “There’s so much competition on the high street now. I think it has to do a lot better to compete.”
Another was shocked to discover what was happening. She said: “I didn’t know about that, I’m furious. It’s one of the best shops here.”
For now the company continues trading, but a buyer is unlikely to be found. BHS has over one billion pounds (1.3 billion euros) in debt. More than half of that – 571 million pounds (734 million euros) – is a deficit in its pension scheme for employees which frightened away potential buyers.
Jeremy Batstone-Carr, Chief Economist at Charles Stanley, said many British retailers are struggling: “Real personal disposable incomes across the board remain pretty suppressed and this is of course having a continually negative effect on the medium- and long-term operating environment for retailers.”
There has been criticism of Philip Green – billionaire owner of the Topshop group – who, when he sold BHS for the token amount of one pound just over a year ago, made little provision for the pension scheme.
The British government’s Pension Protection Fund will now have to cover part of the amount.
Green – who bought BHS for 200 million pounds in 2000 – has reportedly offered the Pensions Regulator 80 million pounds.
A spokesman for the regulator said it had started an investigation into the situation but warned this can sometimes take a considerable amount of time to complete.
The people who bought BHS, Retail Acquisitions, have reportedly paid out more 25 million pounds (32 million euros) to themselves in the last 13 months.