UK department store retailer Debenhams could launch its second CVA in less than a year after it wrote to landlords last week asking for a rent holiday and longer-term reductions as it seeks to manage its operations amid pressures stemming from the Covid-19 outbreak.
The retail group, which employs around 22,000 staff, fell into administration in April last year. Shortly after, its new owner, Celine Jersey Topco Limited, launched a company voluntary arrangement (CVA).
A spokesperson for Debenhams told just-style the company wrote to landlords last week with two asks: a five-month rent holiday because of coronavirus; and longer-term rent reductions to support balance sheet restructuring.
“All retailers are facing unprecedented pressures from the current situation and we are managing our operations to minimise risks to colleagues and customers whilst – as far as possible – trading as normal,” the spokesperson said. “We have access to funding, supportive investors and an experienced leadership team that will take appropriate action to manage through this period.”
According to The Sunday Times, Debenhams has told landlords it will be forced to shut stores through a fresh CVA within weeks if they do not agree to the rent cuts.
The company said in a statement today (23 March), it has taken the “tough decision” to temporarily close its UK and Republic of Ireland stores for trading from close of play today amid the pandemic.
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By GlobalDataIt joins a raft of other apparel and footwear brands and retailers, including Primark, H&M, Nike and Gap Inc, also temporarily closing stores and cutting opening hours as part of efforts to help limit the spread of the coronavirus.
