// Debenhams is seeking to offload bosses’ pension schemes
// It is in talks with the insurer Aviva
// The deal could be confirmed in a matter of weeks
Debenhams is reportedly seeking to offload its executive pension scheme, which holds more than £200 million assets.
The struggling department store chain is in talks with the insurer Aviva about a buyout, Sky News reported.
The deal, which could be confirmed within a matter of weeks, will guarantee future benefits to members of its pension scheme.
It follows Debenhams’ initiative to close down 19 stores across the UK this month, resulting in 660 job losses.
This marks the first wave of closures, as Debenhams aims to shut down almost 50 of its worst-performing stores in its current estate of 166.
The department store entered administration in April 2019 and the new owners who took control afterwards officially launched its CVA later that same month.
The next tranche of store closures – 28 stores – are reportedly expected in 2021.
Late last year, Debenhams lined up £50 million of additional financial support to see it through to the Christmas trading period.
Meanwhile, buyout transactions have become commonplace as businesses seek certainty over their liabilities to pension scheme members.
In Debenhams’ case, the larger scheme, covering the majority of its workforce, will not be included.
Debenhams agreed in 2017 to make annual contributions of £5 million into the pension schemes until March 2022.
That funding plan replaced an agreement under which it had agreed to contribute £9.5 million-a-year to the schemes.
It remains unclear whether Aviva was formally in exclusive talks about a buyout of the Debenhams Executive Retirement Scheme.
Debenhams recently appointed the former finance director of House of Fraser, Mark Gifford, and the former Argos boss John Walden, to its board.
Moreover, the department store retailer appointed British Airways veteran Abigail Comber as its new chief marketing officer last week.