// Debenhams kicks off liquidation process of its Irish, Hong Kong and Bangladesh businesses as part of administration
// Irish liquidation affects 958 direct employees plus 300 concession staff across 11 stores
// The Asian liquidations mean contracts of all 48 Hong Kong & 69 Bangladesh employees will be terminate
Debenhams has started the liquidation process of its Irish, Hong Kong and Bangladesh arms a week after its core UK businesses filed for administration.
In Ireland, Kieran Wallace and Andrew O’Leary from KPMG were appointed as joint provisional liquidators, a process that will affect all 11 Debenhams stores in the country.
The intention to liquidate its Irish business was first revealed in Debenhams’ UK administration announcement last week, and will affect 958 direct employees plus 300 concession staff.
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As revealed last week, Debenhams has already suspended trading in its stores across the republic, but expects the majority to not reopen.
However, while the future of its Irish workforce has not yet been made clear, the Retail Gazette understands that they have been placed on temporary lay-off under the Irish Government’s payment support schemes introduced as part of the coronavirus lockdown.
It’s also understood that Debenhams will be working with the liquidator to support staff through this process.
Meanwhile, Debenhams has reportedly decided to commence a liquidation process on its Hong Kong and Bangladesh sourcing offices, where the contracts of all 48 Hong Kong employees and 69 Bangladesh employees will be terminated.
The struggling department store group appointed advisory firm FRP Advisory as administrators on April 9 in order to protect the UK business from liquidation.
Debenhams has previously said that its “ring-fenced” Danish business Magasin is affected by temporary store closures but continues to trade online with the benefit of its automated distribution facility.
The updates come after the department store chain appointed administrators from FRP Advisory last week it entered administration for the second time in the past 12 months.
Debenhams’ 142 UK stores remain closed in line with government-enforced lockdown orders and the retailer said it would work to “re-open and trade as many stores as possible” when restrictions are lifted.
Around 13,000 of its employees in the UK are currently being paid under the government’s coronavirus job retention scheme (JRS), which covers 80 per cent of the salaries of furloughed staff up to £2500 a month.
FRP Advisory said it was “necessary to “mothball” the business during the Covid-19 pandemic in order to seek to rescue it in the months to come. and that it wanted to continue paying furloughed staff under the JRS.
However, earlier this week lawyers representing FRP Advisory said it may be forced to make “a large part of the significant number of employees of Debenhams” redundant if it is responsible for staff wage liabilities.
This means thousands of jobs may be at risk after the High Court ruled that its administrators could be liable for furloughed staff’s full wages.
FRP Advisory has said it might pursue an appeal against the judge’s decision.