14,000 jobs at risk as Debenhams teeters on brink
DEBENHAMS could be liquidated in a move that would put 14,000 jobs at risk.
The department store chain’s owners are drawing up emergency plans that could see Debenhams shops close and its stock and other assets sold.
If the beleaguered 242-yearold high street stalwart is liquidated, it could trigger the biggest UK jobs cull of the coronavirus pandemic so far.
Sky News reported yesterday the hedge funds that own Debenhams have drafted in Hilco Capital – a firm that specialises in winding up retailers – to help with what is being called ‘contingency’ planning.
The Mail on Sunday revealed last month that Debenhams had been put up for sale and liquidation was being considered if no buyer could be found. The company’s owners want to wrap up any sale by the end of next month. A source close to the company last night said liquidation was still being treated as a last resort after all other efforts to safeguard the company’s future had been exhausted.
The once-thriving retailer, which usually trades from about 142 UK stores, last week said it was shedding 2,500 more jobs after axeing 4,000 staff earlier in the year. It currently has about 124 stores trading.
Debenhams has been in administration since April, when the nationwide lockdown decimated shop revenues.
It was the second time the chain had collapsed in a year. In spring 2019, the retailer, which used to be listed on the stock exchange, was placed in administration after a bitter battle with retail tycoon and Newcastle United owner Mike Ashley, who tried to install himself on the board. Ashley, who controls Sports Direct owner Frasers Group, was Debenhams’ largest shareholder before it was taken off the stock market. He is believed to be interested in buying as many as 30 stores.
Next, run by Lord Wolfson, and a Chinese consortium are also rumoured to be interested in buying Debenhams assets.
Many other high street retailers and restaurant groups have struggled since the Covid pandemic struck, closing branches and cutting jobs.
On Friday, Jigsaw, the fashion brand worn by the Duchess of Cambridge, entered into a company voluntary arrangement (CVA), a form of insolvency allowing businesses to restructure and slash costs – for example, by closing stores or renegotiating rents – without going out of business.
The move by Jigsaw, which is owned by David Ross, the cofounder of Carphone Warehouse, could lead to the closure of 20 stores and 200 job cuts.
Yo! Sushi, the restaurant chain known for its snaking conveyor belt, is also making 250 workers redundant as it closes 19 of its 69 outlets.
A Debenhams spokesman said: ‘Debenhams is trading strongly with 124 stores reopened and a healthy cash position. As a result, and as previously stated, the administrators of Debenhams Retail have initiated a process to assess ways for the business to exit its protective administration.
‘The administrators have appointed advisers to help them assess the full range of possible outcomes which include the current owners retaining the business, potential new joint venture arrangements (with existing and potential new investors) or a sale to a third party.’