Belfast Telegraph

Debenhams tight-lipped on whether Northern Ireland stores will close after auditors called in

 

Debenhams has remained tight-lipped on whether any of its five stores in Northern Ireland will close following the announcement the troubled retailer had called in auditors to consider "closures and insolvency".

The retailer employs 27,000 staff across the UK and Ireland.

Debenhams has stores in Belfast, Craigavon, Ballymena, Newry and Londonderry.

Asked if there were plans to close any stores in Northern Ireland, a spokesperson said: "We have no announcements to make on any store closures in our estate."

The spokesperson added: "“Like all companies, Debenhams frequently works with different advisors on various projects in the normal course of business.”

Debenhams shares plunged 17% after KPMG was called in to help draft emergency plans to save the troubled retailer.

The department store is said to be considering a list of options including a company voluntary agreement (CVA), a controversial insolvency procedure used by struggling firms to shut under-performing shops.

The company has brought in KPMG to help draw up the turnaround plans, according to The Sunday Telegraph which first reported the news.

If Debenhams charges ahead with a CVA, it would join a raft of retailers including New Look, Carpetright and Mothercare, who have opted for the restructuring tool despite anger from landlords who have argued it leaves them out of pocket.

The news sent shares down more than 17% in morning trading.

Debenhams last month said it would swing the axe on up to 90 staff at its fashion and home departments as part of a major cost-cutting drive.

bpanews_aefd80e1-843e-4514-88f2-060b1ca7e2df_embedded1181380
Debenhams shares were floundering in morning trade on Monday (PA)

In January it announced plans to ramp up efficiency savings, with another £10 million earmarked for this financial year and £20 million extra annually.

Chief executive Sergio Bucher, who is leading the shake-up, then went on to slash 320 store management roles in February.

In June, Debenhams issued its third profit warning this year as trading came in “below plan”.

To compound matters, Debenhams is also the subject of takeover talk, with speculation building that Mike Ashley is set to merge it with his newly acquired House of Fraser.

Mr Ashley owns just under 30% of Debenhams, close to the threshold at which he must launch an official takeover bid.

Weekly Business Digest Newsletter

This week's business news headlines, directly to your inbox every Tuesday.

Popular