18 April 2020
Debenhams states it has agreed deals with most of its landlords to keep open 120 of its 142 UK stores. As for the rest of its estate, 'advanced' talks are underway.
7 stores have closed for good, these being based in: Leamington Spa, Stratford-upon-Avon, Sailsbury, South Shields, Truro, Warrington and Westfield. The 422 employees across these stores have been contacted.
Stefaan Vansteenkiste, CEO explained his delight at the progress being made with their discussions with landlords. It ''reflects the pragmatic view the vast majority of them are taking of the current market conditions.''
On the seven store closures, he shares: "Regrettably we have been unable to reach agreement on seven stores and these will not be reopening, and I'd like to express my thanks to our colleagues in these stores at what I know is a difficult time for everyone."
17 April 2020
A week after announcing its core UK arm had filed for administration, Debenhams begins the liquidation process of its Ireland, Hong Kong and Bangladesh businesses.
Kieran Wallace and Andrew O'Leary were appointed as joint provisional liquidators, carrying out the necessary steps for its 11 stores in Ireland. 958 direct employees are at risk, along with 300 concession staff. For now, the staff are on a temporary lay-off under the Irish Government’s payment support schemes introduced following the coronavirus outbreak, but their future is still yet to be confirmed.
It has been reported that Debenhams have decided to carry out a liquidation process also on its Hong Kong and Bangladesh offices. 48 Hong Kong employee contracts and 69 Bangladesh employee contracts are to be terminated.
09 April 2020
Today we hear that Debenhams has officially filed for administration, making it the second time within a year it has used this kind of insolvency process. This follows the impact of the unexpected coronavirus outbreak, on the already struggling department store chain.
Geoff Rowley and Alastair Massey of FRP Advisory have been appointed. A light touch administration is believed to be the adopted approach.
The administration only applies to Debenhams in the UK and is said to have been decided to protect the business from any threat of legal action from creditors which could worsen the situation.
It's 11 Irish stores do not escape the struggle. Directors anticipate that the UK administrators will appoint a liquidator to these operations too. All stores across the republic have had trading suspended but the majority are expected to not re-open. Irish colleagues have been placed on furlough, alike UK staff, but on the Irish Government's scheme.
06 April 2020
Debenhams is facing administration for a second time, with administrators likely to be appointed this week. A notice of intention to appoint administrators has been filed.
The notice is thought to provide short term protection from any legal action ordered by creditors that would push the business into liquidation immediately. It is said to be the ''first necessary step'' to ensure it can make preparations to go back to trading once the lockdown restrictions are lifted.
Debenhams explain itself to be preparing to enter a ''light touch'' administration, seeing the existing management team remain in place but just under the direct control and supervision of the appointed administrators.
Geoff Rowley and Alastair Massey of FRP Advisory have been appointed to advise in relation to the possible administration and KPMG are believed to be on standby to handle the possible fresh insolvency process.
Just last week we heard how talks were being made with landlords regarding its restructuring plan, made more urgent following the effect of COVID-19.
As with most of the high street, all its stores are currently shut. Although trade online continues, it is struggling to sell a large quantity of its stock.
Customer orders, gift cards and returns continue to be accepted and processed as normal.
The 242 year-old retailer employs about 22,000 people. The majority of its workforce are under the 'furlough' scheme and have wages covered for three months by the governments Coronavirus Job Retention Scheme.
Cheif executive, Stefaan Vansteenkiste stated:
“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.”
31 March 2020
Department store, Debenhams, is having to revise its restructuring plans amid COVID-19.
Before the outbreak, there were discussions with landlords about a further restructuring plan said to involve more store closures, but now there is greater urgency for such talks and plans to happen.
Already this year 22 stores have closed, with a further 28 to shut in 2021 as part of its turnaround plan, agreed last April when the chain fell into the hands of its lenders, a group of banks and hedge funds led by US firm Silver Point Capital. This was after it struggled to keep up with competition, rising costs and huge debts.
Now, its new owners and landlords are stuck.
Lenders do not want to put more money into the store unless they know landlords will accept more rent cuts and a five-month rent and service charge holiday. For this to be agreed, a Company Voluntary Arrangement is likely to be needed, being the second one for Debenhams in less than a year.
It is believed that landlords are trying to do the right thing and help retailers who’ve seen a collapse in sales but then on the other side of it, if they fail to get rent they will go bust themselves. Will Debenhams get the required support from its landlords in time?
Currently all Debenhams’ stores are closed after the government ordered all non-essential retailers to shut for a UK lockdown, aiming to slow the spread of the virus.
Debenhams have declined to comment.