Debenhams parent on brink, Harvey Nichols calls in advisers
Aug 24, 2020
The Debenhams plan to file for a light touch administration during lockdown and then emerge from it when its stores reopened looks to be in tatters this week. The retailer’s holding company could be on the verge of administration, joining the trading arm that went into administration in April.
Reports at the weekend said that its parent company Celine Group Holdings has hired administrators from FRP Advisory, the latest bad news after it closed 20 stores and cut more than 6,000 jobs.
The Times said that the company’s future is now dependent on the approach taken by its lenders, which include two US hedge funds. It's believed that a sale process is also underway, but some observers have said they can't see the business being sold as a going concern.
That means Silver Point Capital, which is owed the largest amount by the company, could buy it out of administration and restructure it or even opt for a liquidation, with reports saying that Hilco has already been lined up to handle this if it takes the latter option. That said, insiders have stressed that this is contingency planning and not a signal of an imminent winding up of the firm. This also means that the business could continue to trade as normal and for now, that's what's happening.
The news comes as it has emerged that Harvey Nichols has called in restructuring experts from PwC as only four out of its eight UK and Ireland stores are currently open. The Bristol, Birmingham, Liverpool and Dublin locations remain closed as low tourist arrivals and working from home mean city centre shopping districts are empty.
The Sunday Time said the group is reviewing the viability of the store estate and its financing requirements.
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