Debenhams talks go on as bid deadline comes and goes
The fate of department store chain Debenhams and the 14,000 jobs at the company hang in the balance as a deadline for bids came and went on Tuesday with no resolution.
Bidders had been given a deadline of 17:00 Tuesday evening by the retailer’s advisers from investment bank Lazard, but an insider told The Times that this decline was a “checkpoint” to verify there was genuine interest in a rescue deal.
The main aim is to strike a deal by the end of September. If that doesn’t happen, it would force the retailer to pursue other options. The most extreme of those options would be the complete liquidation of the chain.
Regardless of what management is planning at the moment, there are major complications in the way of a smooth resolution for the chain as it hasn’t been paying rent on its stores and has reportedly not been playing suppliers either.
Hilco capital has been lined up to step in if liquidation does become a necessity. The company has already closed a number of stores and axed 6,500 jobs.
It seems that some level of liquidation is likely with Sky News saying a pitch to potential buyers includes the prospect of half the store estate being closed, leading to profits of £90 million in 2022. It’s seen as unlikely that any potential bidders would want to take on the entire retail operation as it currently stands.
There’s been no confirmation about who might be interested in buying any part of the company but Mike Ashley’s Frasers Group, Next and a Chinese consortium have all been suggested. A Frasers spokesman told The Times that the firm would only be interested in individual stores that it could convert to its Sports Direct and Flannels chains.
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