Debenhams collapses into administration

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.


Share this article



Latest Businesses for Sale

Eco-Friendly, Recyclable & Biodegradable Products Online Retailer
UK Wide

Has in excess of 2,100 subscribers, all of whom provide reliable, repeat business on an ongoing basis, in addition to a high volume of customers making one-off purchases. Operates from leasehold premises; however, the company could be relocated to a...

Asking Price: Offers Invited
Turnover: £1,067,787

RELOCATABLE


High End Sewing Machines Retailer
UK Wide

Flagship retail store specialising in the highest-end brand of sewing machines. Loyal and affluent clientele coming from all over the UK (and overseas). This business has been a leader in the field for 24 years. The sewing machine market is booming,...

Asking Price: £350,000
Turnover: £700,000

LEASEHOLD


Provider of Merchandise
UK Wide

A long-established provider of promotional merchandise both plain and branded for a high-calibre client base. Using a large network of suppliers the company boasts a vastly comprehensive range. Dedicated staff nurture client relationships and promote...

Asking Price: Offers Invited
Turnover: £5,000,000


View more businesses for sale

News Search

Latest News

 
10
 
Jul
 

Mobile phone supplier and recycler goes into administration | ADMINISTRATION

Mobile phone refurbishment company Redeem UK has gone into a...

 
09
 
Jul
 

John Lewis to close eight stores as COVID-19 accelerates shift to online | BUSINESS NEWS

Department store chain John Lewis has said that eight of its...

 
09
 
Jul
 

Chancellor cuts VAT on hospitality as part of £30 billion rescue plan | BUSINESS NEWS

Chancellor Rishi Sunak has announced a £30 billion pla...

Free guide: 10 Biggest Buyer Mistakes

Sign up to receive our acquisition alert emails to get your FREE guide

Email


Related News

 
10
 
Apr
 

Iconic retailer Debenhams falls into administration once again | ADMINISTRATION

The long-established British retailer Debenhams has appointe...

 
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...

Want access to the latest businesses for sale?

Business Sale Report is your complete solution to finding great acquisition opportunities.

Join today to receive:

  • Comprehensive range of businesses for sale
  • Make direct contact with business sellers or their intermediaries
  • Access to all UK administrations, liquidations and winding-up petitions
  • Daily email alerts for the latest businesses for sale & distressed notifications
  • Business Sale Report publication posted to you every month
  • Advertise your acquisition requirements on our "business wanted" section

All this and much more, including the latest M&A news and exclusive resources