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Debenhams' CVA plan to restructure store portfolio
04 May '19
2 min read
Pic: Debenhams
UK’s Debenhams Group Holdings Ltd recently announced details of two proposed company voluntary arrangements (CVAs), one related to Debenhams Retail Limited, the main trading entity, and the other regarding Debenhams Properties Limited. These actions will serve to keep Debenhams on a stable financial footing and ensure the company’s future, it said in a statement.
The issues facing the UK high street are quite well know, but for the business to prosper, Debenhams needs to restructure its store portfolio and balance sheet that are not appropriate for today’s changed retail environment, Terry Duddy, executive chairman of the group, said.
“Our priority is to save as many stores and as many jobs as we can, while making the business fit for the future,” he said.
Debenhams has a leading position in cosmetics and skincare, and a top 5 position in fashion.
All trade suppliers and the entitlements of employees will continue to be paid in full during this process.
The CVA is part of the company’s restructuring and turnaround plan. In conjunction with this, some of the group’s financial creditors recently provided £200 million of fresh liquidity and have committed to equitise £100 million of debt. Value recovery for the shareholders of Debenhams plc is expected to be nil.
The CVA proposals provide a mechanism to restructure the store estate in line with the plan outlined by management in October 2018 to reduce the current 166 UK store portfolio by closing around 50 stores.
The first stage of that programme proposes up to 22 store closures in 2020, the press release added. (DS)
The issues facing the UK high street are quite well know, but for the business to prosper, Debenhams needs to restructure its store portfolio and balance sheet that are not appropriate for today’s changed retail environment, Terry Duddy, executive chairman of the group, said.
“Our priority is to save as many stores and as many jobs as we can, while making the business fit for the future,” he said.
Debenhams has a leading position in cosmetics and skincare, and a top 5 position in fashion.
All trade suppliers and the entitlements of employees will continue to be paid in full during this process.
The CVA is part of the company’s restructuring and turnaround plan. In conjunction with this, some of the group’s financial creditors recently provided £200 million of fresh liquidity and have committed to equitise £100 million of debt. Value recovery for the shareholders of Debenhams plc is expected to be nil.
The CVA proposals provide a mechanism to restructure the store estate in line with the plan outlined by management in October 2018 to reduce the current 166 UK store portfolio by closing around 50 stores.
The first stage of that programme proposes up to 22 store closures in 2020, the press release added. (DS)
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