// Debenhams mulling further rent cuts & additional store closures as part of its ongoing CVA
// Fears that Debenhams could be forced to launch fresh insolvency proceedings if agreement with landlords not met
// Follows news it had asked landlords for a 5 month rent holiday amid coronavirus crisis
Debenhams is reportedly mulling further rent cuts and additional store closures as part of its ongoing CVA to avoid becoming the next retail casualty from the coronavirus crisis.
According to Drapers, the department store retailer has written to landlords with their requests, but its main goal was still to “identify long-term profitability”.
Debenhams is reportedly also “considering all options”, but sources told Drapers that the retailer at risk of falling victim to fresh insolvency proceedings if landlords don’t agree to the proposals.
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The news comes shortly after Debenhams requested for a five-month rent holiday from its landlords as it finds ways to deal with disruptions caused by the coronavirus pandemic.
The department store chain had asked for the rent-free period to begin immediately.
Reports have since emerged that a growing number of other retailers including New Look, Arcadia and JoJo Maman Bébé are asking landlords for rent cuts or or delays to payments.
Debenhams, along with House of Fraser, continues to open their high street stores amid the pandemic – while competitors such as John Lewis, Selfridges, Harrods, Harvey Nichols, Fenwick and Liberty London have all temporarily closed.
Debenhams fell into administration in April last year and its new owner, a consortium of banks and lenders known as Celine, launched its CVA later the same month.
The CVA included rent cuts of 25 per cent to 50 per cent on some stores and earmarked around 50 stores for closure.
The first tranche of store closures – 22 sites – took place in January, well before the coronavirus outbreak became a pandemic and sent the UK into a state of crisis.
Debenhams is reportedly continuing discussions with landlords to determine the next tranche of closures.