Thousands of jobs are at risk at a British retail giant sold for just £1 last year

BHS, the stricken high street retailer, is set to cuts thousands of jobs and close between a quarter and half of its total stores as part of an effort to cut costs and ensure its future, the company said on Thursday.

Reports of how many stores BHS, which stands for British Home Stores, plans to close vary, but the company says that it is seeking an immediate reduction in rent for 47 stores, which could close if landlords fail to agree to rent cuts. The Guardian reports that between 50 and 60 will be shuttered.

There has been no official announcement of how many jobs could be cut, but BHS currently employs 12,000 people across Britain, so if it shuts in excess of 47 shops, job losses would likely spiral into the thousands.

The announcement of potential store closures and job losses comes after BHS' leadership unanimously decided to file a company voluntary agreement (CVA), a kind of insolvency proceeding designed to allow the company to get out of some of its liabilities. The Financial Times reports that the decision was made at a board meeting on Thursday afternoon.

BHS' problem is that rents for many of its stores are incredibly high, and as a result, the company can no longer afford the costs associated with many shops, thanks in part to the big move towards online shopping in recent years hitting footfall and profitability.

As one unnamed source told the FT: "These leases were agreed at a time before digital retail, when the high street was vibrant... We'd love to keep them but we can't at the rents that we're paying out."

In a statement, the company said that in many places it pays "in excess of market rates."

Speaking about the store closures, BHS chief executive Darren Topp said:

The CVA proposal that we have announced today is a necessary milestone in resetting British Home Stores to ensure its long term future as an iconic British retail brand. Some of our stores are loss-making as we are being charged rents that are too high relative to today's market. The CVA will address this issue.

Although a difficult process to go through, this sets in motion the comprehensive updated turnaround plan that we have identified, and gives British Home Stores a secure financial footing from which to grow and deliver sustainable profitability.

BHS was previously owned by Arcadia group, the high street giant chaired by Sir Phillip Green. Arcadia's portfolio includes the likes of Topshop, Miss Selfridge, and Dorothy Perkins. Arcadia sold BHS to little known consortium Retail Acquisitions Ltd for just £1 in March 2015.