Virtually every Sunday newspaper is reporting that Debenhams might soon disappear from high streets across the UK, with The Sunday Times summing the situation up in its headline: ‘Debenhams puts liquidators on standby’.
Debenhams owners have appointed advisers, Hilco, who specialise in company liquidations and who have in the past wound up the business activities of high-profile retail businesses including BHS, Woolworths and electronics specialist Maplin.
Hilco has been brought in by the department store’s bosses to draw up contingency plans for a possible liquidation. Debenhams has been in administration – a legal move to protect it from its creditors – since April and recently announced it was looking for a buyer in a deal that would need to be concluded by September – now it seems time might be running out for the company founded in 1813 and for its 14,00 staff.
In a statement Debenhams said it was ‘trading strongly’ and Hilco’s appointment did not necessarily mean a liquidation was likely. Last week it announced that 2,500 more jobs were to go, this on top of 4,000 job losses it announced in May.
Debenhams filed for administration in April – the second time in a little over a year. Options for the future of the business include the current owners continuing to run it, a sale of Debenhams or a joint venture with new or existing investors.
However if the administrators, FRP Advisory, fail to find a buyer or new investment, Debenhams WILL face liquidation.
A spokesperson for the department store said: “Debenhams is trading strongly, with 124 stores reopened and a healthy cash position.” The retailer began reopening its shops – including the store in Hastings – in June after being closed since lockdown in late March.
The company was struggling before the pandemic, including issuing a string of profit warnings.