Debenhams faces administration for second time in one year

Debenhams at Westwood Cross

Debenhams may go into administration for the second time in one year.

The retailer is understood to be considering filing for administration next week. The firm, which has a store at Westwood Cross, employs 22,000 people across the country.

The aim is to shield the company from legal claims from creditors during the coronavirus outbreak. The majority of staff are currently furloughed following the closure of its 142 stores in line with government regulations and will have 80% of their wages covered for three months by the government.

Last April the company announced details of two proposed Company Voluntary Arrangements (the “CVA”): one relating to Debenhams Retail Limited, the main trading entity; and one relating to Debenhams Properties Limited. However, 22 stores were listed for closure, including one n Canterbury.

The decision to go into administration is not yet finalised and another solution may be found.

A Debenhams spokesperson said: “Like all retailers, Debenhams is making contingency plans reflecting the extraordinary current circumstances. Our owners and lenders remain highly supportive and whatever actions we may take will be with a view to protecting the business during the current situation.

“While our stores remain closed in line with government guidance, and the majority of our store-facing colleagues have been furloughed, our website continues to trade and we are accepting customer orders, gift cards and returns.”