Beleaguered department store Debenhams has gone into administration after it turned down approaches from Sports Direct’s Mike Ashley.
The store chain, which employs 25,000 people, has been taken over by its lenders with FTI Consulting appointed as administrators. While its stores will continue trading for now, it is expected to close 50 of its 150 stores, although no timeframe has been set out.
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Debenhams chairman Terry Duddy said: “It is disappointing to reach a conclusion that will result in no value for our equity holders.”
He added: “We remain focused on protecting as many stores and jobs as possible, consistent with establishing a sustainable store portfolio in line with our previous guidance.
“In the meantime, our customers, colleagues, pension holders, suppliers and landlords can be reassured that Debenhams will now be able to move forward on a stable footing. I would like to thank them all for their recent and continuing support.”
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Debenhams suspended trading at 8am this morning after rejecting another rescue offer by Sports Direct. It has made a revised £200 million rescue offer in a bid to delay the store’s likely administration.
The move is expected to trigger store closures and job losses as part of a wider restructuring that will see around 50 outlets shut via a Company Voluntary Arrangement.
The widely-anticipated change of ownership means that shareholders such as Ashley's Sports Direct, who holds a 30% stake, will see their investments wiped out.
More to follow..
