Debenhams fight on with £40m lifeline
HIGH street chain Debenhams has secured its short term future after receiving a £40m cash boost.
The retailer has faced an uncertain future amid financial pressures across the company and has been involved in talks with advisers which included the possibility of entering administrations.
The ongoing problems raised questions about the future of a number of stores, including the large branch on Lord Street in Southport.
But Debenhams this weeek announced the lifeline from its lenders in a boost for staff and shoppers in Southport.
The funding will act as a bridge while the company continues talks for a longer-term refinancing.
Chief executive Sergio Bucher said that the announcement “represents the first step in our refinancing process”.
He added: “The support of our lenders for our turnaround plan is important to underpin a comprehensive solution that will take account of the interests of all stakeholders, and deliver a sustainable and profitable future for Debenhams.”
It ends months of uncertainty over the company’s finances, which led to Sports Direct boss and Debenhams shareholder Mike Ashley saying the firm had little chance of survival.
Mr Ashley’s offer of a £40 million loan was turned down on the basis that his terms would affect other shareholders.
Separately, Debenhams announced on Tuesday that it has reached an agreement with supply chain manager Li & Fung to oversee some of the chain’s sourcing.
The Hong Kong-listed firm was described by Mr Bucher as being a “key part” of the Debenhams turnaround plan.
“It gives us access to state-ofthe-art technology in the LF Digital platform, providing end-to-end visibility across our supply chain.
“This will help us anticipate and respond more quickly to trends and our customers’ preferences, as well as delivering better quality product,” he said.
The news comes as high street chains increasingly battle financial struggles.
In the past week, both HMV and furniture store BrightHouse announced they would leave Southport, while uncertainty hangs over a host of other firms including Card Factory and Marks and Spencer.
The departure of HMV left another large gap in the town centre and means that, along with the former H&M and BHS stores, three of Chapel Street’s largest units are now empty.