Debenhams to be wound down after rescue talks fail
The Debenhams department store chain is to be wound down after a rescue deal with JD Sports failed to materialise.
The move will put 12,000 jobs at risk and comes hot on the heels of Arcadia Group entering administration yesterday.
Debenhams called in administrators back in April but continued to operate while seeking a buyer. It has already cut 6,500 jobs since May.
Today, the retailer said in a statement: “Debenhams confirms that its administrators, FRP Advisory, have concluded the initial sale process that was part of their assessment of options for the UK business in administration. Those options included a sale of all or part of the UK business; a further restructure of Debenhams’ operations to go forward on a standalone basis; or the orderly wind-down of the Debenhams business.
“The sale process has not resulted in a deliverable proposal. Given the current trading environment and the likely prolonged effects of the Covid-19 pandemic, the outlook for a restructured operation is highly uncertain. The administrators have therefore regretfully concluded that they should commence a wind-down of Debenhams UK, whilst continuing to seek offers for all or parts of the business.”
Meanwhile, Debenhams’ 124 UK stores and website will continue to trade to help clear current stock. However, the retailer said it will close at the end of the process if no offers for the business are received. This does not impact Debenhams’ Magasin du Nord store in Denmark, which continues to operate independently.
Geoff Rowley of FRP Advisory, joint administrator to Debenhams and partner at FRP, said: “All reasonable steps were taken to complete a transaction that would secure the future of Debenhams. However, the economic landscape is extremely challenging and, coupled with the uncertainty facing the UK retail industry, a viable deal could not be reached. The decision to move forward with a closure programme has been carefully assessed and, while we remain hopeful that alternative proposals for the business may yet be received, we deeply regret that circumstances force us to commence this course of action.
“We are very grateful for the efforts of the management team and staff who have worked so hard throughout the most difficult of circumstances to keep the business trading. We would also like to thank the landlords, suppliers and partners who have continued to work with Debenhams through this turbulent period and can reassure them that all contractual obligations entered into in the administration period will be met in full.”
