U.K. department store operator Debenhams has sold the business to its lenders
U.K. department store operator Debenhams said it has sold the business to its lenders. Photo: Ben Birchall/PA Wire/Zuma Press By Nina Trentmann and Adriano Marchese April 9, 2019 3:14 p.m. ET U.K. department store operator Debenhams PLC said it has sold the business to its lenders, a move that comes as falling consumer spending, uncertainty around Brexit and rising competition from online retailers put the U.K.’s High Street retailers under pressure.
The group, which also has a presence in Denmark, the Middle East and Ireland, will restructure its operations by closing some stores and reducing its leverage, the administrators said. Debenhams employs about 25,000 people. Debenhams had issued several profit warnings in 2018 and its enterprise value—at between £371 million and £427 million, according to accounting firm BDO LLP—is currently lower than its financial debt of £520 million. “The group’s balance sheet and liquidity had become extremely stretched with increasing levels of debt and with significant lease liabilities,” the administrators said.
“It is disappointing to reach a conclusion that will result in no value for our equity holders,” said Debenhams Chairman Terry Duddy.
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