Debenhams needs to find a buyer as fears mount that thousands more could lose jobs
DEBENHAMS has asked interested buyers to submit offers by the end of today or there are fears thousands more workers could lose their jobs.
The struggling department store chain's administrator, FRP Advisory, is examining a sale of the department store chain but its current private equity owners would prefer a restructuring that allows them to stay in charge.
Should neither sale or restructuring come to pass, a liquidation looms.
FRP has lined up Hilco Capital, a specialist in winding down troubled retailers, to oversee a liquidation of Debenhams if none of the alternative options bears fruit.
Debenhams currently employs around 12,000 workers but just last month it cut 2,500 jobs as the retail chain continues its battle to survive.
Even if a sale is agreed potential scenarios being discussed by buyers include liquidating more than half of stores, leaving it with 60 outlets.
Since coronavirus lockdown measures eased, the department store chain has reopened 124 branches.
Debenhams had 142 stores at the start of 2020, but it cut 19 branches in January and a further 18 didn't reopen after lockdown.
It comes after it fell into administration for the second time in 12 months earlier this year when it decided to implement a "pre-pack administration" deal.
This was thought to be more favourable than a £200million rescue plan from Sports Direct tycoon, Mike Ashley, which would have seen Debenhams' lenders agree to write off £82million of its £720million debts.
Mr Ashley and rival chain Next could be interested in a number of stores, reports say.
In the meantime, the chain’s management are trying to secure the future of as many stores and jobs as possible by reducing Debenhams' rents and rates bills.
Debenhams has begun fighting an attempt to increase its business rates bill in Swansea, which it describes as a "test case" that will determine the group's future.
Within weeks, management will also have to decide whether to invest in new stock.
Independent retail analyst Richard Hyman believes it's the end of the road for most of the chain's stores. He said: "If this was a car, it’s failed its MOT, is not roadworthy and has no driver… potential passengers beware.
"There will be a tiny number of stores that might be worth something. The rest, I’m afraid, is finished."
Sadly Debenhams is just one in a long line of retailers to grapple with job cuts following the spread of Covid-19 with Boots, John Lewis, M&S, and WH Smith all confirming mass redundancies.
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The Sun has contacted Debenhams.
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A spokesperson for the retailer last month said: "The trading environment is clearly a long way from returning to normal and we have to ensure our store costs are aligned with realistic expectations...
"Such difficult decisions are being taken by many retailers right now, and we will continue to take all necessary steps to give Debenhams every chance of a viable future."