LONDON — British retailer Debenhams, caught in a perfect storm of weak footfall and trading, debt restructuring and the crippling impact of the coronavirus, is seeking bankruptcy protection. The company had taken the first steps toward filing for administration in the U.K. earlier this week.
The retailer said Geoff Rowley and Alastair Massey of FRP Advisory have been appointed administrators in the U.K. As reported, the retailer has entered administration to protect the Debenhams U.K. business from the threat of legal action that could have pushed the business into liquidation.
While it may be trying to save its stores in the U.K., Debenhams plans put its Irish business into liquidation. The company said that due to the challenges facing Debenhams Retail (Ireland) Ltd., the U.K. administrators will appoint a liquidator to the Irish operations.
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Debenhams has already suspended trading in its 11 Republic of Ireland stores due to the impact of COVID-19, and said Thursday that the majority of them are not expected to reopen. “The affected colleagues have been placed on furlough under the Irish Government’s payment support schemes for employers,” said Debenhams, adding that customers in Ireland will be able to shop online through the retailer’s local site.
The chain’s 142 U.K. stores remain closed in line with the British government’s current advice regarding the COVID-19 pandemic.
According to Debenhams, the administrators will adopt a “light touch” while the stores remain closed, working with the existing management team to get the business into a position to reopen and trade through as many stores as possible again when restrictions are lifted.
Debenhams continues to trade online across the U.K., Ireland and Denmark, in line with government guidelines, while the lockdown continues. The company said customer orders, gift cards and returns are being accepted and processed normally.
Stefaan Vansteenkiste, chief executive officer of Debenhams, said, “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.”
He said management anticipates “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.”