Debenhams on brink for second time in just a year
DEBENHAMS has filed for administration for the second time in a year after being forced to close its 142 stores during the coronavirus crisis.
The struggling retailer said that, with the majority of the 22,000 staff on furlough, it wants to push the business into administration then buy it back debt-free.
‘This move will protect Debenhams from the threat of legal action that could have the effect of pushing the business into liquidation while its UK stores remain closed,’ it added.
The department store chain, which was rescued by its lenders after collapsing into administration only a year ago, filed a notice of intent to appoint administrators from FRP Advisory.
It added it was making preparations to open again once government coronavirus restrictions are lifted. In the meantime, the existing management team remains in place under the direct control and supervision of the administrators.
Julie Palmer, of corporate restructuring specialist Begbies Traynor, said: ‘Debenhams has been in financial difficulties for a while so this doesn’t come as a major surprise, but it will leave its 20,000-plus strong workforce in a precarious position who will struggle to get new employment during the ongoing uncertainty.’
The company continues to trade online across the UK, Ireland and Denmark and customer orders, gift cards and returns are being accepted and processed normally. It has closed 22 shops in recent months as part of plans to shut 50 sites and bring its total estate to 110.