Debenhams readying to appoint administrators amid Covid-19

Department store chain Debenhams is reportedly set to enter administration for the second time in a year in order to protect the business from creditors during the coronavirus outbreak.

According to Sky News, the embattled retailer could file for administration as early as next week, with ‘Big Four’ accountancy firm KPMG among the possible auditors which would handle the process.

In a statement to Sky News on Friday (3 April), a Debenhams spokesperson said: “Like all retailers, Debenhams is making contingency plans reflecting the extraordinary current circumstances Our owners and lenders remain highly supportive and whatever actions we may take will be with a view to protecting the business during the current situation.

“While our stores remain closed in line with government guidance, and the majority of our store-facing colleagues have been furloughed, our website continues to trade and we are accepting customer orders, gift cards and returns.”

The news comes after the department store had written to landlords to inform them that it requires a five-month rent holiday. Debenhams also notified suppliers, earlier this week of a 31 day-delay to some payments.

Additionally, on 24 March Debenhams closed 142 stores across the UK as a result of the coronavirus pandemic sweeping the nation. The vast majority of its workforce was furloughed following the move.

Debenhams said it took the “tough decision” to close stores as a result of the current circumstances, but hopes to reopen as soon as it is “practically and safely possible”. Customers will still be able to shop with the retailer through its website.

In April last year Debenhams fell into the hands of its lenders after it entered pre-pack administration. Debenhams Group Holdings Limited, its subsidiaries and certain dormant companies, which together make up the Debenhams Group, were transferred to the ownership of Celine UK NewCo 1 Ltd.