Debenhams to close with 12,000 jobs lost
2 Dec 2020
Debenhams is to cease trading, with the loss of some 12,000 jobs, after administrators from FRP Advisory said all other options to save the 242-year-old retailer had been exhausted
2 Dec 2020
In April Geoff Rowley and Alastair Massey of FRP Advisory were appointed as the company’s administrators in the UK. Debenhams said the move was designed to protect it from the threat of legal action that risked pushing the business into liquidation while its 142 UK stores remain closed during the first Covid lockdown.
In July when restrictions were lifted, Debenhams reopened 124 stores in the UK, although its 11 Republic of Ireland stores were closed.
However, the company has now collapsed, with FRP Advisory reporting that it had concluded the initial sale process that was part of their assessment of options for the UK business in administration, without finding a deliverable proposal.
JD Sports Fashion, the retailer owned by Mike Ashley, confirmed that its discussions regarding a potential acquisition of the UK business had been terminated, and a further restructuring of the company was also ruled out, given the current trading environment and the likely prolonged effects of the Covid-19 pandemic.
The administrators have now begun a wind-down of Debenhams UK, whilst continuing to seek offers for all or parts of the business.
Debenhams is continuing to trade through its 124 UK stores and online to clear its current and contracted stocks. On conclusion of this process, if no alternative offers have been received, the UK operations will close. This does not impact Magasin du Nord in Denmark, which continues to operate independently.
Geoff Rowley, joint administrator to Debenhams and partner at FRP Advisory, 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.
‘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.’
Debenhams is the second major high street retailer to fold this week, following the collapse of Arcadia Group on Monday.