Department store group Debenhams has filed a Notice of Intent (NOI) today to appoint an administrator in the UK. This move will protect Debenhams from the threat of legal action that could potentially push the business into liquidation while its 142 UK stores remain closed in line with the government’s current Covid-19 advice.
Debenhams is making preparations to resume trading its stores once the government lifts restrictions; the filing of an NOI in the UK is the first necessary step in that process. The group is preparing to enter a “light touch” administration. This means the existing management team remains in place under the direct control and supervision of the administrators.
The group has the support of its lenders and they plan to provide the funding for the administration. It also continues to fully engage with all employees and suppliers while operating within a protective arrangement. The majority of the employees in the UK are currently under the government’s furlough scheme. Payments to suppliers who continue to provide goods and services during the administration will remain unaffected.
Debenhams continues to trade online across the UK, Ireland and Denmark in line with government guidelines while the lockdown continues.
Debenhams in the Republic of Ireland has the same trading restrictions as the UK. Employees will, therefore, receive furlough payments under the Irish government scheme. The group’s Danish business, Magasin, also has store closures but continues to trade online.
“These are unprecedented circumstances,” says Stefaan Vansteenkiste, CEO of Debenhams. “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 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.”
The Group has appointed Geoff Rowley and Alastair Massey of FRP Advisory to advise concerning the possible administration.
