Advertise with fastmoving.co.za
 
 

Debenhams’ lenders took control of the ailing British retailer after it went into administration, wiping out shareholders including billionaire Mike Ashley in the latest corporate failure on the high street.
Debenhams’ lenders took control of the ailing British retailer after it went into administration, wiping out shareholders including billionaire Mike Ashley in the latest corporate failure on the high street.

UK’s Debenhams falls into administration

INTERNATIONAL NEWS

By Kate Holton and Paul Sandle - Apr 9th, 14:47

Debenhams’ lenders took control of the ailing British retailer after it went into administration, wiping out shareholders including billionaire Mike Ashley in the latest corporate failure on the high street. 

Once the biggest department store chain in the UK, Debenhams has been battling with a sharp slowdown in sales, high rents and ballooning debt, plus an acrimonious battle with its largest shareholder, Ashley’s Sports Direct.

While its stores will keep trading, the appointment of administrators marks the latest corporate failure in the British retail sector after House of Fraser, electronics firm Maplin and cycle shop Evans all struggled to stay afloat.

Administrators from FTI Consulting immediately sold Debenhams’ holding company to a new entity owned by its lenders. Contracts with stores, staff and suppliers were held by its operating companies and will not be affected, it said.

The announcement marks defeat for the retail billionaire Ashley, who has spent months battling to wrest control of the business, offering a rescue plan that came with the condition he was appointed CEO.

“It is disappointing to reach a conclusion that will result in no value for our equity holders,” chair Terry Duddy said. “However, this transaction will allow Debenhams to continue trading as normal; access the funding we need; and proceed with executing our turnaround plans, whilst deleveraging the group’s balance sheet.”

Despite its long history, Debenhams has been battling for survival after a consumer shift online and to cheaper outlets destroyed 90% of its share value in the past year. It currently has debt facilities worth £720m and a market valuation of £22m. Business Live 

Read more about: retailer | retail | debenhams | business | administration |

Related News

Truworths profit at nine-year low as profit plunges over 70%
16/08/2019 - 11:52
Shares in Truworths slumped to a nine-year low on Friday morning after the fashion retailer reported a 74% slide in profits amid difficult trading environments in SA and the UK.

UnionPay cards - the largest card scheme in the world - now accepted at all Pick n Pay stores across SA
16/08/2019 - 11:11
UnionPay International (UPI) has announced significant progress in the South African retail payments market through their co-operation with Pick n Pay and Absa Bank. Through a tripartite co-operation agreement, Pick n Pay, a major food, clothing, and general merchandise retailer, is now enabled to accept UnionPay cards at all of its till points across its approximately 1,800 stores countrywide.

Pernod Ricard SA to centralise operations with Johannesburg move
16/08/2019 - 10:27
In a move set to enhance cohesion, collaboration and efficiencies, Pernod Ricard South Africa (PRSA), a co-leader of wine and spirits worldwide will officially relocate its Cape Town offices to Woodmead, Johannesburg by 31st December this year.

Why equipment finance makes sense for your SME
15/08/2019 - 15:26
Every business, be it in retail, agriculture, and even tech, simply cannot operate without the necessary equipment to run their operations. Equipment can be costly, and that is why equipment finance for small businesses appeals to most small-medium business owners.

With banana leaf lamps, H&M backs firms promising social change
15/08/2019 - 10:31
With lampshades made by Indian women and trays from East Africa, H&M said that it had become the latest retail giant to back businesses with a mission to do good, as pressure mounts to end throwaway consumerism.