Debenhams Seeks to Exit Administration, Potentially via Sale

Debenhams Plc, one of the U.K.’s biggest department stores, has kicked off a plan that could see new owners as the struggling retailer assesses ways to exit its protective administration.

Possible outcomes include the current owners retaining the business, potential joint-venture arrangements that could involve new investors, or a sale to a third party, the company said in an emailed statement.

Investment bank Lazard will be appointed to oversee the process to determine Debenhams’s future and handle any talks with possible buyers, according to the Mail on Sunday. The existing backers want to conclude the process by the end of September, the Mail said, citing unidentified sources.

Like other main-street chains, the company has been badly hit by the global pandemic forcing shoppers to stay at home for months on end. It was already struggling with the shift to online and was taken over by lenders last year, making it one of the U.K.’s highest-profile retail casualties.

Debenhams has reopened 124 of its 142 U.K stores and is trading ahead of expectations, the company said, adding that its process will be guided by what delivers the best outcome for creditors. Law firm Freshfields is among the City firms understood to be advising on the process, according to the Mail. The company’s main creditors are Silver Point Capital, Alcentra, GoldenTree and Barclays Plc.

A Chinese consortium is among potential investors that have already emerged, according to the Mail. Other bidders for parts of the U.K. chain could include billionaire Newcastle United owner Mike Ashley, who owns rival House of Fraser. Debenhams has already rejected previous overtures by Ashley to buy and turn around the chain’s fortunes.

©2020 Bloomberg L.P.

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