Debenhams to go into liquidation
Administrators FRP Advisory has confirmed that Debenhams will be wound down. The administrators have been working on a sales process for the chain since its latest collapse in April.
It was aiming to either sell all or part of the business, restructure the group’s operations, or wind down the business altogether.
FRP Advisory said that “the sale process has not resulted in a deliverable proposal” and that the outlook for a restructured operation was “highly uncertain”. This left winding down the business the only option.
Debenhams will continue to trade through its 124 UK stores and online to clear its current and contracted stocks.
Geoff Rowley of FRP Advisory said: “All reasonable steps were taken to complete a transaction that would secure the future of Debenhams. However, the economic landscape is extremely challenging and, coupled with the uncertainty facing the UK retail industry, a viable deal could not be reached.
“The decision to move forward with a closure programme has been carefully assessed and, while we remain hopeful that alternative proposals for the business may yet be received, we deeply regret that circumstances force us to commence this course of action.
“We are very grateful for the efforts of the management team and staff who have worked so hard throughout the most difficult of circumstances to keep the business trading. We would also like to thank the landlords, suppliers and partners who have continued to work with Debenhams through this turbulent period and can reassure them that all contractual obligations entered into in the administration period will be met in full.”
The news comes the day after Sir Phillip Green’s Arcadia group collapsed, putting 13,000 jobs at risk.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “Arcadia Group’s collapse has set off a domino effect, with JD Sports pulling out of talks to buy Debenhams. Arcadia is the biggest concession operator in Debenhams and so its collapse into administration clearly put the frighteners on management.
“The decision has shares in JD Sports up again today, in a relief rally following a sharp decline last week. Next is also on the front foot. It’s already shown resilience through the pandemic with its strong digital offering, and it too could capitalise on the demise of two high-street rivals.”