Debenhams has announced its intent to appoint an administrator in order to “protect” the business from creditors during the coronavirus outbreak.
It is believed the move will work to prevent liquidation while its 142 UK stores remain closed in line with government advice amid the ongoing pandemic.
The news closely follows initial reports last Friday that the retailer was planning to call in administrators. The group said it has now appointed Geoff Rowley and Alastair Massey of FRP Advisory to advise in relation to the possible administration.
Debenhams has dubbed the appointment a “light touch” administration, whereby the existing management team will remain in place “under the direct control and supervision of the administrators”.
It will be the second time in a year that Debenhams has filed for administration. 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.
The group will continue to trade online across the UK, Ireland and Denmark, in line with government guidelines as the lockdown continues.
Stefaan Vansteenkiste, CEO of Debenhams, said: “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.”
He added: “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.”