Court win means Debenhams will close at The Fort
DEBENHAMS is to close its store at The Fort Shopping Park after the company won a High Court case allowing it to shut 22 stores across the UK.
The Castle Bromwich store will close its doors after the chain got the go-ahead for its plans for a company voluntary arrangement, which will put 1,200 jobs at risk.
A store in Wolverhampton will also shut as Debenhams closes 22 of its least profitable stores and slashes rents on more than 100 outlets. The big store in Birmingham’s Bullring is unaffected, and remains open.
Debenhams chief executive Stefaan Vansteenkiste welcomed the judgement that the retailer’s CVA plans were valid.
“We are delighted that the court has today confirmed that our CVA is effective and will continue to be implemented as planned,” he said.
“We note that the only aspect that the judge required to be adjusted was a technical provision of the CVA relating to landlord forfeiture provisions.
“Our proposals had unprecedented levels of support from our landlords and today’s outcome is good news for our 25,000 employees, our pensioners and suppliers.
“We retain the support of our lenders, and everyone at Debenhams can continue to focus on trading ahead of
Christmas period.”
Debenhams won approval from 80 per cent of its landlords for its restructuring plans after it was taken over by the people it owed money to.
But not everyone agreed, with some of of the department store’s landlords, including Mike Ashley’s Sports Direct, objecting to the rent reductions the CVA included.
Sports Direct withdrew its objection in July, but others continued with their action, resulting in the court case.
Mr Justice Norris
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High Court said four of the five grounds for the case had failed, but that with the offending part removed, the CVA is valid. He said that “the CVA is valid and remains enforceable”, but gave Discovery Limited the right to appeal.
The stores closing are at Altrincham, Ashford, Birmingham Fort, Canterbury, Chatham, Eastbourne, Folkestone, Great Yarmouth, Guildford, Kirkcaldy, Orpington, Slough, Southport, Southsea, Staines, Stockton, Walton, Wandsworth, Welwyn Garden City, Wimbledon, Witney and Wolverhampton.