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Debenhams mulling administration - report

Fri 03 April 2020 13:34 | A A A

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(Sharecast News) - Beleaguered department store chain Debenhams is considering going into administration, it emerged on Friday.

According to Sky News, the 242-year old retailer, which employs around 22,000 people, has put accountants KPMG on standby. Sky added that administrators could be appointed "as early as next week".

Debenhams has already temporarily suspended the vast majority of its workers under the Coronavirus Job Retention Scheme. The retailer has shut 142 stores after the government ruled all but essential shops should close.

Going into administration, however, would help shied the company from legal claims from creditors during the outbreak, Sky News claimed.

In a statement issued to Sky, Debenhams said: "Like all retailers, Debenhams is making contingency plans reflecting the extraordinary current circumstances.

"Our owners and lenders remain highly supportive and whatever actions we may take will be with a view to protecting the business during the current situation. While our stores remain closed in line with government guidance, and the majority of store facing colleagues have been furloughed, our website continues to trade and we are accepting customer orders, gift cards and returns."

Debenhams' lenders, led by US hedge Silver Point Capital, took control of the retailer last April after a protracted public battle with Sports Direct owner and leading shareholder Mike Ashley.

Under the turnaround programme put in place, several stores have been closed as it looks to shut a total of around 50 stores. However, those plans have been put on hold following the coronavirus outbreak, which has rocked non-essential retailers as customers stay home, shops shut and the economy grinds to a halt.

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