Kingpin of Gloucester high street to file for administration
By Punchline Reporter | 6th April 2020
Debenhams, the kingpin of Gloucester retail and stalwart of high streets nationwide, is set to file for administration.
Last week, Sky News reported that the department store was is in talks to line up an administrator in an effort to protect it from creditors during the coronavirus crisis.
This morning, the 420-plus year-old business which employs 22,000 staff, confirmed that it had filed a notice of intention to appoint administrators.
Debenhams, which has a department store off King's Square and Northgate Street in Gloucester, has already furloughed the vast majority of its workforce and closed its 142 stores UK-wide due to the pandemic.
The move covers the wages of staff for the next three months under the government's Coronavirus Job Retention Scheme.
A statement released this morning said: "Department store group Debenhams today has filed a notice of intent ("NOI") to appoint an administrator in the UK.
"This move will protect Debenhams from the threat of legal action that could have the effect of pushing the business into liquidation while its 142 UK stores remain closed in line with the government's current advice regarding the Covid-19 pandemic.
"The group is making preparations to resume trading its stores once government restrictions are lifted. The filing of an NOI in the UK is a first necessary step in that process.
"The group is preparing to enter a "light touch" administration that will see the existing management team remain in place under the direct control and supervision of the administrators."
Stefaan Vansteenkiste, CEO of Debenhams, added: "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."
It is understood Debenhams has already written to its landlords to inform them it requires a five-month rent holiday and told some of its suppliers there could be a 31-day delay to some payments.
Sky suggested the most likely outcome of administration would be "a pre-pack sale back to its current owners, with the company shed of its existing financial liabilities".
Shopworkers' trade union Usdaw has called for urgent talks to give staff a voice in the future of the company, as the company appears to be on the verge of going into administration again.
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