Debenhams, which employs about 22,000 people, could signal a plan to appoint administrators as early as next week, according to Sky News. KPMG, the accountancy firm, is understood to be among those on standby to handle the process, reports say.
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The prospective appointment would be designed to shield the company from legal claims from creditors during the coronavirus outbreak, Sky News reports.
However, it’s understood a firm decision to appoint administrators has not been taken, and it remains possible than an alternative outcome could emerge.
During the coronavirus crisis, the retailer has put the vast majority of its workforce of “furlough”, following the closure of its 142 UK stores.
80 percent of these employees’ wages – up to £2,500 per month – will now be covered for three months under the government’s Coronavirus Job Retention Scheme.
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Debenhams employs 22,000 people (Image: GETTY)
Despite closing its stores in line with government guidance, the retailer’s website remains open.
In a statement on Friday, a Debenhams spokesman said: “Like all retailers, Debenhams is 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.
“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 and we are accepting customer orders, gift cards and returns.”
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The retailer is said to have already written to landlords to inform them that it requires a five-month rent holiday, while this week notifying suppliers of a 31-day delay to some payments.
Debenhams, which was founded in the 18th century as a single store in London, has been working on a plan to permanently close up to 50 of its shops.
In April 2019, Debenhams announced a number of store closures as part of the company’s restructuring.
In January 2020, Debenhams closed 19 of its stores.
Coronavirus UK key measures were announced by the government last week (Image: GETTY)
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Debenhams chief executive, Stefaan Vansteenkiste, said: “We are working hard to implement the transformation of Debenhams.
“Despite a challenging retail environment, thanks to our colleagues’ hard work and our investor group’s commitment we are progressing with our turnaround.”
Last Monday, Prime Minister Boris Johnson announced stringent measures in a bid to slow the spread of coronavirus in the UK.
Under the new coronavirus rules, the Prime Minister said members of the public should only leave their homes if its for one of a number of specified rules.
Mr Johnson also ordered shops selling “non-essential goods” to close.
In a statement, Mr Johnson said: “To ensure compliance with the Government’s instruction to stay at home, we will immediately close all shops selling non-essential goods, including clothing and electronic stores and other premises including libraries, playgrounds and outdoor gyms, and places of worship.”
Currently, the government measures state that people “should only leave the house for very limited purposes:
Shopping for basic necessities, for example food and medicine, which must be as infrequent as possible.One form of exercise a day, for example a run, walk, or cycle – alone or with members of your household.Any medical need, including to donate blood, avoid or escape risk of injury or harm, or to provide care or to help a vulnerable person.Travelling for work purposes, but only where you cannot work from home.”