Troubled department store BHS has been thrown a lifeline after creditors backed plans to turn the business around.
The loss-making retailer said that 95% of creditors, which include landlords, voted in favour of a company voluntary arrangement (CVAs) to cut the rents on its stores and prevent widespread closures.
Votes against the plans may have caused BHS to plunge into administration, putting more than 10,000 jobs at risk.
Instead, 47 stores will see a rent cut of either 75% or 50%, while 40 stores will continue to trade for a minimum of 10 months as negotiations with landlords are held on reducing rents by 25%.
A second CVA for BHS Properties Ltd, which covers a further 23 BHS stores, was also voted through.
BHS will to continue to pay the rent at the current rate on 77 of its best-performing stores by making monthly rather than quarterly payments for the next three years.
CEO Darren Topp said: "On behalf of all at BHS I would like to thank our creditors and landlords for voting in favour of supporting this CVA. This gives BHS the opportunity to move forward.
"It is a tough time for retailers across the UK with huge structural challenges faced by all, however, we have a very credible plan to return BHS to growth and profitability and a revitalised British Home Stores will emerge as we accelerate our turnaround plans.”
Will Wright, restructuring partner at KPMG and supervisor of CVAs said the yes votes will enable BHS to tackle the issue of an unsustainable lease burden, which was weighing heavily on the business.
“While together, the two CVAs comprise only one element of BHS’s plan to turn around its fortunes, they are a critical cog in the mechanism that will put the business in a stronger operational position. The proposal process has given both the company and its creditors the opportunity to agree a compromise that is mutually acceptable.”
The news comes a year Sir Philip Green sold BHS to its current owner Retail Acquisitions for £1.