Creditors back Debenhams CVA plan

The creditors of  high street giant Debenhams have approved the company voluntary arrangement (CVA) proposals put forward by the business in April.

Jim Tucker, restructuring partner at KPMG and joint supervisor of the CVA, said: “The approval of these CVAs marks an important step forward for Debenhams, which can now put the next phase of its financial and operational turnaround plans in motion.

“As with all CVAs, more than 75% of creditors had to vote in favour in order to pass the resolution. Today’s vote saw the significant majority of all voting creditors choose to approve the two proposals.”

It follows the announcement two weeks ago that Debenhams plans to shut 22 stores next year as part of a restructuring of the department store chain.

Around 1,200 staff work at the affected stores. The closures will be part of two CVAs and are expected to be the first wave that will eventually see around 50 of Debenhams’ 166 stores shut.

In April, its chief executive Sergio Bucher departed after a pre-pack administration resulted in the company’s lenders taking control.

The stores expected to close in 2020 are 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, Wolverhampton.

Ed Cooke, Chief Executive at Revo, said: “As Terry Duddy said last week, the CVA will impact only landlords and local councils. So investors, other retailers and the man and woman on the street are suffering as a consequence of historic poor management decisions, that left the business in this precarious situation.

“We will continue to work with government and industry bodies to deliver reform of the CVA regime to stop the damaging impact they are having on towns and cities across the country.”