Wed, 10 Apr 2019 | ADMINISTRATION
Thought to be the largest department store in the UK, Debenhams has entered administration in the face of crippling debt and fierce competition on the high street.
Entering a pre-pack administration, the business has been sold to its lenders and has passed on control, and now have access to £200 million worth of emergency funds.
Business advisory firm FTI Consulting has been called in to handle the administration process, with the administrators stating: “The group has been sold for a price which in our opinion is the best price reasonably obtainable at the time of sale.”
As a result of this transaction, Debenhams will be “immediately marketed for onward sale” to salvage funds in order to pay off the company’s debts and cover its pension liabilities.
This action comes in response to Debenhams rejected a £200 million rescue deal from Sports Direct’s Mike Ashley, who also wanted to take over as chief executive.
However, under the company voluntary agreement (CVA), its debts will be reduced and will undergo a restructuring programme. However, roughly 50 stores are earmarked for closure, but none before 2020.
In an attempt to further cut costs, the company will aim to renegotiate rent reductions with its landlords, which insolvency practitioner David Ereira from Paul Hastings law firm says may be met with resistance.
Despite the complications, Debenhams will continue its trading operations as usual. However, Richard Lim from Retail Economics has said: “Debenhams has fallen victim to crippling levels of debt, which has paralysed its ability to pivot towards a more digital and experience-led retail model.
“Put simply, the business has been outmanoeuvred by more nimble competitors, failed to embrace change and was left with a tiring proposition. The industry is evolving fast and it paid the ultimate price.”
For more news stories about administrations click here. For all our administrations listings, click here.
Extremely attractive and highly profitable sub-Post Office and convenience store which is situated in an unopposed trading position in the highly desirable and village of Feniscowles, in a semi rural surrounding, close to Blackburn Town Centre and wi...
LEASEHOLD
Fantastic opportunity to purchase a busy licensed convenience store. The store is a popular local business located on the busy Moorside Road of Urmston. The business has been well-run by the current owners for twenty years and is now on the market a...
LEASEHOLD
100% of the issued share capital of this long time established Hand/Power tools, bearings, bolts, and welding business. The company provides an efficient, reliable bolts and bearings service in East Anglia. Offers invited.
LEASEHOLD
|
18
|
|
Sep
|
Infrastructure investment manager takes stake in LJLA | BUSINESS SALE
Infrastructure investment management group, Ancala Partners,...
|
17
|
|
Sep
|
Impact REIT snaps up Suffolk-based Cardinal Healthcare business | BUSINESS SALE
Impact REIT has successfully acquired Cardinal Healthcare, a...
|
16
|
|
Sep
|
Cheshire-based SRL Traffic Systems completes MBO | MBO/MBI
SRL Traffic Systems, a manufacturer and supplier of portable...
Sign up to receive our acquisition alert emails to get your FREE guide
|
04
|
|
Oct
|
Beauty bar chain in Debenhams enters administration | ADMINISTRATION
Swansea-headquartered beauty bar chain, Arch Angelz Ltd has ...
|
14
|
|
Dec
|
House of Fraser sale on the cards | BUSINESS SALE
The owner of the House of Fraser department store group, Don...
|
29
|
|
Sep
|
Alexon facing potential pre-pack administration | ADMINISTRATION
Womenswear company Alexon has suspended trading of its share...
Business Sale Report is your complete solution to finding great acquisition opportunities.
Join today to receive:
All this and much more, including the latest M&A news and exclusive resources