Debenhams goes into liquidation

Debenhams is to be placed into liquidation after hopes of a last minute rescue deal with JD Sports collapsed, putting 12,000 jobs at risk at the beginning of a torrid week for the UK High Street.

The announcement said that Debenhams will be wound down after administrators failed to find a buyer for the 242-year old department store chain.

The decision came less than 24 hour news that Sir Philip Green’s Arcadia retail empire announced that they had appointed Deloitte as administrators, as the High Street continues to reel from the impact of Coronavirus restrictions.

In a statement issued this morning, Debenhams confirmed that its administrators, FRP advisory, had concluded the sale process initiated in April, stating talks had not “resulted in a deliverable proposal.”

As a result, the administrators decided that an orderly wind-down of the Debenhams business was the only viable proposal.

“Given the current trading environment and the likely prolonged effects of the COVID-19 pandemic, the outlook for a restructured operation is highly uncertain.
The administrators have therefore regretfully concluded that they should commence a wind-down of Debenhams UK."

Debenhams said it will continue to trade for now across its 124 stores in the UK and online in order to clear stock whilst they continue to seek offers for all or parts of the business.

“On conclusion of this process, if no alternative offers have been received, the UK operations will close,” the statement continued.

Geoff Rowley of FRP Advisory, joint administrator to Debenhams and partner at FRP, said:“All reasonable steps were taken to complete a transaction that would secure the future of Debenhams.

"However, the economic landscape is extremely challenging and, coupled with the uncertainty facing the UK retail industry, a viable deal could not be reached. The decision to move forward with a closure programme has been carefully assessed and, while we remain hopeful that alternative proposals for the business may yet be received, we deeply regret that circumstances force us to commence this course of action.”

He added: “We are very grateful for the efforts of the management team and staff who have worked so hard throughout the most difficult of circumstances to keep the business trading. We would also like to thank the landlords, suppliers and partners who have continued to work with Debenhams through this turbulent period and can reassure them that all contractual obligations entered into in the administration period will be met in full.”

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