UK court orders winding up of retail giant Debenhams
A UK court has passed a winding up order against Debenhams PLC on 25 January 2021 and appointed the official receiver as liquidator.
Debenhams PLC was formerly the holding company for the Debenhams retail group, but at the date of liquidation it had no active operations or employees, a UK government website announced.
The trading arms of the retailer, Debenhams Retail Limited and Debenhams Properties Limited, remain in administration. The administrators for both companies are Geoffrey Paul Rowley and Alastair Rex Massey of FRP Advisory.
Meanwhile, the company in a press statement said that the boohoo Group plc has signed an agreement to buy the Debenhams brand and other business assets including all the in-house brands and websites; which will take full effect following the completion of the current stock liquidation programme, which is continuing online.
boohoo group plc has paid a cash consideration of £55million to acquire the global rights to Debenhams brands and its websites. This transaction will allow a new Debenhams-branded business to emerge, including an online operation and the opportunity to secure an international franchise network that will operate under licence using the Debenhams name.
Once Debenhams stores are able to reopen and the stock liquidation can continue in stores, the website will be operated by boohoo. The closing down sale will continue in stores for several weeks until the stock liquidation is completed and the value of this stock will be retained for creditors.
The company further informed that all the UK stores will then be permanently closed.
Geoff Rowley, Joint Administrator and Partner of FRP Advisory, said: “We are pleased to have secured the future for this great brand, and to have created the opportunity for a new Debenhams-branded business to emerge in a different shape beyond the pandemic. I expect that the agreement with boohoo may provide some job opportunities but we regret that this outcome does not safeguard the jobs of Debenhams’ employees beyond the winding down period. We are very grateful that they have worked tirelessly through this very challenging period and will continue to support the closing down sale. I’d also like to thank the management team, who have worked very hard throughout to protect the business and support us in delivering the best outcome for stakeholders.”
According to another press release by the company, stores in Portsmouth, Staines, Harrogate, Weymouth and Worcester will not reopen. In addition, the Oxford Street store will also be unable to reopen as the company could not agree for a lease agreement with the landlord. In total, 320 workers will be affected by these store closures.
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Debenhams operates around 130 stores in the UK and Denmark which together provide over 10 million square feet of trading space. All UK stores trade under the name of Debenhams; the Danish stores are under the Magasin du Nord banner. The order does not affect Magasin du Nord in Denmark, which continues to operate independently.
