Debenhams, once the country’s biggest department store group, could file for administration as soon as next week in a bid to protect its business from creditors during the pandemic.
Debenhams’ lenders took control of the retailer in April last year in an effort to keep stores open. They have since shut due to the outbreak.
In response to a Sky news report, a spokesman for Debenhams said the retailer was 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,” he said.
“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.”
Speaking about the news Sofie Willmott, Lead Analyst at GlobalData, a leading data and analytics company, said: “Placing Debenhams into administration for the second time within twelve months will tide it over for now, freeing it from debts but ultimately its owners are merely stringing out its demise and its long-term future remains bleak. With significant further investment in the business now very unlikely, it is difficult to see what will attract shoppers back once its stores can reopen.”
“The department store chain was in already trouble before the COVID-19 pandemic hit and the sharp shift in consumer shopping habits will only speed up inevitable changes in the UK market. Weaker retailers without a unique selling point will be weeded out, with many unable to survive the year.”