Debenhams Prepares To File For Administration
The department store chain is on the brink of collapse due to the coronavirus pandemic, which has forced the retailer to close its stores.
The high street chain has now filed a notice of intent to appoint administrators in a bid to protect itself from creditors.
Debenhams has 22,000 members of staff and 142 stores across the country, all of which have had to close due to the ongoing social distancing measures and lockdown.
As a result of this, it is believed the chain currently has millions of pounds worth of inventory it no longer needs.
However, it will be the second time in a year Debenhams has filed for administration, having already closed 22 stores this year with plans to shut a further 28 next year.
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"This move will protect Debenhams from the threat of legal action that could have the effect of pushing the business into liquidation while its 142 UK stores remain closed in line with the government's current advice regarding the COVID-19 pandemic," Debenhams said in a statement.
"The group is making preparations to resume trading its stores once government restrictions are lifted."
It's believed the majority of Debenhams' staff have been furloughed and will be paid under the government's job retention scheme.
This provides workers with 80 per cent of their salary up to £2,500 per month.
Stefaan Vansteenkiste, chief executive of Debenhams, said: "These are unprecedented circumstances and we have taken this step to protect our business, our employees, and other important stakeholders, so that we are in a position to resume trading from our stores when Government restrictions are lifted.
"We are working with a group of highly supportive owners and lenders and anticipate that additional funding will be made available to bridge us through the current crisis period.
"With their support and working with other key stakeholders, including landlords, pension trustees and business partners, we are striving to protect jobs and reopen as many Debenhams stores for trading as we can, as soon as this is possible."
Featured Image Credit: PA