Former BHS owner Dominic Chappell "preparing bid" for BHS - but insiders think he's "living in cloud cuckoo-land"

Catherine Neilan
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BHS To Go Into Administration
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The former owner of BHS, Dominic Chappell, is close to making a bid for the iconic retailer that entered administration on Monday - but sources have already dismissed him as "living in cloud cuckoo-land".

Chappell, who is facing pressure under claims he took £1.5m out of the firm and moved into another company called BHS Sweden last week, told the BBC today he was interested in buying the whole group, albeit without the 40 loss-making stores.

Administrators Duff & Phelps have been told and talks with US-based investors were at an "advanced stage", he is reported to have said.

However sources close to the business said any plans by the former racing driver to buy BHS back lacked credibility.

Read more: It would be a fool's errand to resurrect BHS now

One told City A.M."The feeling is he must be in cloud cuckoo-land - we'd repeat back to him his own words - 'bonne chance mon ami'.

"This is the man who transferred £1.5m out of the business to a completely independent account, which bore BHS' name, after he found out what was happening."

BHS Sweden - the account to which Chappell transferred the money - is unconnected to the British retailer. After being quizzed on the matter, all but £50,000 was returned, which has been chalked up to the cost of currency exchange.

Administrators had received more than 30 expressions of interest in the 88-year-old British institution over the weekend before Duff & Phelps were officially called in. That has since risen to more than 50.

Chappell is the majority shareholder of Retail Acquisitions, which bought BHS for £1 last year from Sir Philip Green, and took on the now-controversial £571m pension deficit. Green is being called to appear in front of MPs to discuss the shortfall, it was confirmed this morning.

Read more: Is Philip Green being unfairly blamed for the demise of BHS?

But insiders believe Green is not to blame, the source said.

"Dominic is saying the business failed because of Philip's failings on pensions, but that's nonsense. The reason the business failed is simply because RAL failed to deliver the funds they said they would through property sales."

Chappell could not be reached at the time of publication.

Duff & Phelps said it received several expressions of interest, and expected "them to continue increasing" but declined to comment further.