Welcome to Top Store

Best Products at Best Prices

0$0.00

No products in the cart.

Debenhams appoints administrators and liquidates Irish chain | Business


Debenhams has fallen into administration, casting fresh doubt over the future of the struggling chain, which has also said it will not reopen its Irish stores, resulting in 1,400 job losses.

The company, which has around 20,000 employees and 142 stores, confirmed the appointment of restructuring firm FRP Advisory as administrators and said its first move would be to place its Irish chain into liquidation. Debenhams had said it would go into administration at the start of this week after it faced legal action that could have forced the closure of the whole business.

Stefaan Vansteenkiste, chief executive of Debenhams, said: “We are desperately sorry not to be able to keep the Irish business operating but are faced with no alternative option in the current environment. This decision has not been taken lightly and is no way a reflection on our Irish colleagues, whose professionalism and commitment to serving our customers has never been in question.”

The Irish chain has 11 stores, including four in Dublin and two in Cork. The workforce included 950 Debenhams staff and 450 people working for in-store concessions. The staff have already been stood down under the Irish government’s wage support scheme.

Debenhams’ owners and lenders are expected to make additional funding available to fund the administration period, Vansteenkiste said. “In these unprecedented circumstances the appointment of the administrators will 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.”

The retailer’s stores are closed due to the government-mandated shutdown, although its website is still operating. The majority of its UK workforce has been furloughed.

Debenhams, which is hobbled by a £600m debt pile, was listed on the stock exchange until last April, when its deteriorating finances resulted in an administration that wiped out shareholders and transferred ownership to a group of financial investors that includes the US hedge funds Silver Point and .

Like other struggling chains, it has used an insolvency process known as a company voluntary arrangement (CVA) to cut rents and close unprofitable stores including a group of 19 shops in January. It is currently trying to negotiate a fresh round of rent reductions with landlords.

Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

Sofie Willmott, a retail analyst at consultancy firm GlobalData, said Debenhams’ second administration in 12 months was “stringing out its demise and its long-term future remains bleak”. “With significant further investment in the business now very unlikely, it is difficult to see what will attract shoppers back once its stores can reopen.

“The department store chain was in already trouble before the Covid-19 pandemic hit and the sharp shift in consumer shopping habits will only speed up inevitable changes in the UK market. Weaker retailers without a unique selling point will be weeded out, with many unable to survive the year.”



Source link