Debenhams mulls legal challenge over rent while Frasers Group faces legal threat

2367
Debenhams mulls legal challenge to absolve them of paying rent
A spokesman for FRP Advisory denied that any court applications were being considered.
// Debenhams’ administrators reportedly mulling launching a legal challenge to absolve them of paying rent bills
// LondonMetric is preparing a legal challenge against Frasers Group regarding unpaid rent at an Evans Cycles store

Debenhams’ administrators are thinking about launching a legal challenge that could absolve them of responsibility for its rent bill, according to The Sunday Times.

The news comes just days after the department store chain struck a deal with landlords so around 120 of its 142 stores would re-open after lockdown restrictions are lifted, although seven stores will shut down permanently, affecting 422 staff.

Debenhams said on Friday it was in “advanced talks” with landlords for the remainder of its estate and that they felt “confident” more deals will be reached in the coming days.


READ MORE: 


However, the retailer also warned that “a handful” of additional stores may be at risk of closure, but this was dependent on landlord conversations.

The Sunday Times reported that if the landlords of its other stores also agree terms, FRP Advisory – which was appointed administrators for Debenhams just over a week ago – may not need to launch a legal challenge.

A spokesman for FRP Advisory also denied that any court applications were being considered.

Debenhams had previously asked landlords to sign new leases that included a five-month rent-free period as its full store estate shut down due to the lockdown.

The Sunday Times also reported that property firm LondonMetric was preparing a legal challenge against Mike Ashley’s Frasers Group, specifically regarding unpaid rent at its Evans Cycles store in Martlesham, near Ipswich.

LondonMetric chief executive Andrew Jones said he would only help fragile companies, and suggested that its offer for Frasers Group to pay 50 per cent of the rent was fair.

When Debenhams appointed administrators from FRP Advisory last week, it marked the second time in 12 months that the department store chain had launched such an insolvency process.

Debenhams said FRP Advisory would adopt a “light touch” administration, meaning the existing management team remain in place under the direct control and supervision of the administrators.

For that reason, the retailer said the landlord discussions so far have been carried out “by existing management for existing owners, under supervision of administrator”.

Debenahms also said on Friday that landlord discussions were an “important part of securing the future of the business and ensuring as many stores as possible re-open” once lockdown restrictions are relaxed.

Click here to sign up to Retail Gazette’s free daily email newsletter

LEAVE A REPLY

Please enter your comment!
Please enter your name here