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.
Sales are predominately generated through the company’s comprehensive e-commerce website which enables the business to distribute goods to clients both domestically and internationally.
RELOCATABLE
Well-established within its region, with a superior reputation and multiple clients in several sectors.Prides itself on the successful delivery of projects to an exceptionally high standard, providing an efficient service. Has won a prestigious award...
FREEHOLD
Specialises in the provision of complete gym design solutions, ranging from the supply, installation, maintenance and servicing of premium and high-performance gym equipment.
LEASEHOLD
|
03
|
|
Dec
|
Halfords to acquire £157m-turnover Axle Group Holdings for £62m | BUSINESS SALE
Halfords Group has announced that it will acquire automotive...
|
02
|
|
Dec
|
Staycation M&A surge continues as Midlothian plans £170m Park Leisure sale | BUSINESS SALE
Midlothian Capital Partners is reportedly exploring a potent...
|
02
|
|
Dec
|
Private equity-backed takeovers stabilise in third quarter | BUSINESS NEWS
The latest Buy and Build Barometer from Rickitt Mitchell has...
Sign up to receive our acquisition alert emails to get your FREE guide
|
25
|
|
Jan
|
Boohoo acquires Debenhams brand in £55m deal | BUSINESS SALE
Online retailer Boohoo has acquired the Debenhams brand in a...
|
01
|
|
Dec
|
Debenhams set to close after JD Sports withdraws interest in wake of Arcadia collapse | BUSINESS NEWS
JD Sports has confirmed that it has pulled out of talks to a...
|
25
|
|
Nov
|
JD Sports emerges as final remaining bidder for Debenhams | BUSINESS SALE
Sportswear chain JD Sports is reported to be in exclusive ta...
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