UK department stores chain Debenhams said it will file for administration as figures showed the extent to which Britain’s economy is suffering during the coronavirus pandemic, the Independent reports.
The struggling department store chain, which employs 22,000 people, will bring in administrators to try to protect itself from legal action that could bring about the company’s collapse.
Debenhams faced being chased by suppliers and other creditors who have not been paid as a result of the global virus pandemic. Debenhams said it was preparing for all of its stores to reopen once the coronavirus lockdown conditions are eased by the government.
The company said in a statement: “This move will protect Debenhams from the threat of legal action that could have the effect of pushing the business into liquidation while its 142 UK stores remain closed in line with the government’s current advice regarding the virus pandemic.”
The group has 142 stores in the UK, which have been closed since the government ordered all non-essential shops to shut as part of its efforts to contain the spread of coronavirus, the Financial Times reports. Debenhams said it was making preparations to resume trading once restrictions were lifted. It is still selling online, although this accounts for only about a fifth of Debenhams’ revenues.
Chief executive Stefaan Vansteenkiste said the company had opted for administration “to 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 are working with a group of highly supportive owners and lenders and anticipate that additional funding will be made available to bridge us through the current crisis period,” Vansteenkiste said.
“We are striving to protect jobs and reopen as many Debenhams stores for trading as we can, as soon as this is possible,” he added, although the company did not deny that more stores may close as a result of the administration process.-Photo: Stirling Observer
