Debenhams looks set to slump into administration for second time
Beleaguered department store Debenhams looks set to be placed into administration for a second time in the space of a year.
The retailer, which is one on the oldest in the UK, employs 22,000 staff.
It has key stores across the North West including Manchester and Liverpool.
Last April it underwent a pre-pack administration.
Several weeks later a series of store closures were announced.
Closures included the recently opened Wolverhampton store along with Altrincham, Birmingham Fort and Southport.
Management are said to be attempting to protect the business from creditors.
The firm has filed a Notice of Intent (“NOI”) to appoint an Administrator in the UK.
The filing of an NOI in the UK is a first necessary step in that process.
The firm said it has the support of its lenders and they plan to provide the funding for the administration.
Payments to suppliers who continue to provide goods and services during
the administration will remain unaffected and be paid to terms.
Debenhams has furloughed the vast majority of its workforce and the firm being placed into administration would protect it from creditors during the coronavirus pandemic.
The 242-year-old department store has appointed Geoff Rowley and Alastair Massey of FRP Advisory to advise on the “light touch” administration of the company.
The company said it was a “necessary step” it protect it from the threat of legal action which would send it into liquidation.
The chain’s 142 stores are currently closed and Debenhams said it plans to reopen all of them once government restrictions are lifted.
The retailer is continuing to trade online and customer orders, gift cards and returns are being accepted and processed normally.
Stefaan Vansteenkiste, chief executive of Debenhams, said: “These are unprecedented circumstances and we have taken this step to protect our business, our employees, and other important stakeholders, so that we are in a position to resume trading from our stores when Government restrictions are lifted.
“We are working with a group of highly supportive owners and lenders and anticipate that additional funding will be made available to bridge us through the current crisis period.
“With their support and working with other key stakeholders, including landlords, pension trustees and business partners, we are striving to protect jobs and reopen as many Debenhams stores for trading as we can, as soon as this is possible.”