Sep 9, 2018

Struggling Debenhams draws up restructuring plans

Debenhams, the department store chain, has asked advisers to explore restructuring plans that could lead to store closures, as the downturn engulfing the UK high street continues to spread. KPMG is investigating turnround options that may also include it asking creditors to accept a compulsory voluntary arrangement, said a person with knowledge of the matter. To raise money Debenhams has put non-core assets up for sale, such as Danish department store chain Magasins du Nord, which it is hoping will fetch up to £200m. The company has also identified 30 stores that could be resized and is in negotiations with landlords. The company returned 20 per cent of the floorspace in its Uxbridge store to a landlord, which opened a Zara fashion shop there instead. However, like other retailers, Debenhams is dogged by long and inflexible leases and was downgraded by rating agency Moody's over the summer because of the outlook for its profitability. Debenhams is one of the UK's oldest retailers, tracing its origins to a drapers store in 1778, which sold expensive fabrics, gloves, bonnets and parasols to Londoners. The company, which employs more than 20,000 people, has 240 stores across 27 countries.

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