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Debenhams files notice of intent to appoint administrator
10 Apr '20
2 min read
Pic: Debenhams
UK department store group Debenhams recently filed a notice of intent (NoI) to appoint an administrator in the United Kingdom. This move will protect it from the threat of legal action that could have the effect of pushing the business into liquidation while its 142 UK stores are closed in line with the government’s current advice regarding the COVID-19 pandemic.
When a business goes into administration, a licensed insolvency practitioner (IP) will be appointed to oversee the procedure. The administrator assumes control of the company from the current directors and manages the business from that point onwards.
The group has appointed Geoff Rowley and Alastair Massey of FRP Advisory to advise in relation to the possible administration.
The group is making preparations to resume trading its stores once government restrictions are lifted. The filing of an NoI in the UK is a first necessary step in that process. The group is preparing to enter a ‘light touch’ administration that will see the existing management team remain in place under the direct control and supervision of the administrators.
The group has the support of its lenders and they plan to provide the funding for the administration. The majority of the employees in the United Kingdom are currently being paid under the government’s furlough scheme owing to all stores being temporarily closed.
Payments to suppliers who continue to provide goods and services during the administration will remain unaffected and be paid to terms, the company said in a press release.
Debenhams continues to trade online across the UK, Ireland and Denmark, in line with government guidelines, while the lockdown continues. Customer orders, gift cards and returns are being accepted and processed normally.
Debenhams in the Republic of Ireland is affected by the same trading restrictions as the UK and employees have been furloughed under the Irish government scheme. The group’s ring-fenced Danish business, Magasin, is also affected by store closures but continues to trade online with the benefit of its modern and highly automated distribution facility.
When a business goes into administration, a licensed insolvency practitioner (IP) will be appointed to oversee the procedure. The administrator assumes control of the company from the current directors and manages the business from that point onwards.
The group has appointed Geoff Rowley and Alastair Massey of FRP Advisory to advise in relation to the possible administration.
The group is making preparations to resume trading its stores once government restrictions are lifted. The filing of an NoI in the UK is a first necessary step in that process. The group is preparing to enter a ‘light touch’ administration that will see the existing management team remain in place under the direct control and supervision of the administrators.
The group has the support of its lenders and they plan to provide the funding for the administration. The majority of the employees in the United Kingdom are currently being paid under the government’s furlough scheme owing to all stores being temporarily closed.
Payments to suppliers who continue to provide goods and services during the administration will remain unaffected and be paid to terms, the company said in a press release.
Debenhams continues to trade online across the UK, Ireland and Denmark, in line with government guidelines, while the lockdown continues. Customer orders, gift cards and returns are being accepted and processed normally.
Debenhams in the Republic of Ireland is affected by the same trading restrictions as the UK and employees have been furloughed under the Irish government scheme. The group’s ring-fenced Danish business, Magasin, is also affected by store closures but continues to trade online with the benefit of its modern and highly automated distribution facility.
Fibre2Fashion News Desk (DS)
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