Debenhams restructuring approved

The creditors of struggling British department stores group Debenhams on Thursday backed a restructuring plan that will see 22 stores closed next year, putting 1,200 jobs at risk.

Debenhams’ lenders took control of the retailer last month in a rescue deal which wiped out the company’s shareholders, including Sports Direct boss Mike Ashley, who had tried to buy the whole group.

Administrators, appointed after Ashley’s last-ditch bid to rescue the company failed, sold the group to its creditors including British banks and U.S. hedge funds.
The investor consortium now said it would retain ownership after bids for the chain fell short of the level they wanted.

They will restructure the chain using company voluntary arrangements (CVAs), which allow retailers to avoid insolvency by offloading unwanted stores and securing lower rents on others and reach a compromise with creditors.

The CVAs ultimately aim to reduce Debenhams’ current 166 UK store portfolio by closing about 50 stores, with 22 set to shut their doors in 2020.

Via Reuters/The Financial Times