Parent of stricken department store chain ‘preparing for its own administration’

The parent company of high street chain Debenhams has reportedly hired advisers to handle its own administration.

According to reports in The Telegraph and The Times, Celine Group Holdings has hired Philip Watkins and Philip Armstrong from FRP Advisory.

However, this is understood to be aimed at avoiding paying overdue interest payments on £200m of bonds which were believed to have been due on July 15.

The move will not affect Debenhams’ own administration process, its sales, customers or its staff.

The department store chain entered a ‘light touch’ administration in April this year, the second time it had done so in the space of a year, to protect it from creditors while it conducted a sales process for the business. Directors are still running the chain, rather than administrators.

However, Celine has hinted that the retailer could be liquidated if a sale out of administration is not secured by the end of September.

According to Sky News, financial investor and adviser Hilco Capital has been appointed to oversee such a strategy should they fail to find a buyer for the stricken retailer.

Investment bank Lazard was appointed by the administrators of Debenhams in late July to handle a sale to a third party to bring its current administration to a close.

Debenhams has already announced around 6,500 redundancies since the Government imposed lockdown measures in March when the pandemic started to take its toll.

It has closed 20 stores, although it said since reopening following an easing of social distancing measures by the Government, its remaining 124 stores were trading strongly.