Debenhams confirms administration for second time in 12 months

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Department store chain Debenhams has confirmed it has formally entered administration.

The firm has appointed administrators from the FRP Advisory to oversee the process, after announcing it had filed a notice of intent to appoint administrators on Monday.

It is the second time Debenhams, which employs around 22,000 staff, has entered administration in the past 12 months.

Debenhams’ 142 UK stores remain closed in line with Government guidance and the company said it will work to “re-open and trade as many stores as possible” when restrictions are lifted.

However, it said its Irish business, which runs 11 stores with around 1,400 staff, will cease trading as part of the move.

The company will continue to trade online in Ireland, the UK and Denmark.

The majority of its employees in the UK are currently being paid under the Government’s furlough scheme.

Stefaan Vansteenkiste, chief executive officer of Debenhams, said: “In these unprecedented circumstances the appointment of the administrators will protect our business, our employees, and other important stakeholders, so that we are in a position to resume trading from our stores when Government restrictions are lifted.

“We anticipate that our highly supportive owners and lenders will make additional funding available to fund the administration period.

“We are desperately sorry not to be able to keep the Irish business operating but are faced with no alternative option in the current environment.

“This decision has not been taken lightly and is no way a reflection on our Irish colleagues, whose professionalism and commitment to serving our customers has never been in question.”

Last year Debenhams was effectively taken over by its lenders, with shareholders – including Sports Direct, run by Newcastle United owner Mike Ashley – being wiped out when it was unable to pay off huge levels of debt.

It also closed 22 stores around the country as part of a rescue plan.

Figures last week showed that Britain’s high street retailers suffered their worst month on record in March as they were hammered by the Covid-19 lockdown.

The latest monthly BDO high street sales tracker saw total like-for-like sales dive 17.9% for the month as shoppers stayed indoors.

In-store sales were particularly badly hit, plunging 34.1% after non-essential stores were told to shut their doors in the face of the pandemic.

Reduced footfall due to social distancing protocols also hit stores during the month, while shoppers’ attentions were diverted to essential items such as groceries.

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