// Debenhams prepares to seek new owners via a sale of the business
// Other options are being considered to help secure its future after its administration earlier this year
// It trades from 124 stores and permanently closed down around 20 stores during lockdown
Debenhams is reportedly pushing forward with a plan that could see a change of hands after retailer fell into administration for the second time within a year during lockdown.
According to The Mail on Sunday, investment bank Lazard has been appointed to oversee a process that could determine Debenhams’s future and handle any talks with potential buyers.
Possible outcomes include the current owners retaining the business, potential joint-venture arrangements that could involve new investors, or a sale to a third party, Debenhams said in a statement.
- Debenhams to reopen remaining Scotland stores next week
- Debenhams to reopen Welsh & Scottish stores after “successful” English reopenings
- Debenhams reopens another 38 stores after initial 50 on Monday
The Mail on Sunday cited sources who said the existing backers want to conclude the process by the end of September and law firm Freshfields is also among the City firms understood to be advising on the process.
A Chinese consortium is reportedly among potential investors that have already emerged, as well as Frasers Group owner Mike Ashley, despite Debenhams rejecting his various takeover offers last year in the months leading up to its first administration.
Debenhams stated it has now reopened 124 stores across the UK and was “trading ahead of expectations”.
The retailer added that the administrators had initiated a process to assess ways to exit its “light touch” administration – which means directors are still running the business rather than handing it over to the administrators.
Before the coronavirus pandemic gripped the UK in March, Debenhams operated from around 142 stores.
The subsequent lockdown prompted Debenhams to file for administration in April – the second time it has pursued that insolvency process within a year – and since then 18 stores have permanently shut down.
Debenhams never provided exact figures on how many jobs were affected by the store closures, but various reports suggest it could be in the thousands.
The administration process has also led to scores of job cuts in Debenhams’ head office functions.
Debenhams also reportedly entered lockdown with debt of £600 million.
When it first went into administration in 2019, shareholders had their stake wiped out as ownership of the department store chain transferred to a consortium of financial investors known as Celine.
Shortly after, Debenhams underwent a CVA process that saw it close stores and renegotiate rents.
While Debenhams’ Irish operation has already placed into liquidation, a liquidation of its core UK business would only happen of all options have been exhausted.