Debenhams shares suspended after Sports Direct takeover rejected

Mae Love
April 10, 2019

It will see stores continuing to trade as normal for now, but shareholders including Sports Direct will be wiped out.

The move is expected to trigger store closures and job losses as part of a wider restructuring that will see around 50 outlets shut via a company voluntary arrangement.

But he said it would allow Debenhams to continue trading as normal, access new funding and carry out its turnaround plans, while reducing debt.

The company has sold its entire ownership to its creditors, after rejecting a rescue offer from Sports Direct - which came with conditions that Debenhams bosses felt they would not be able to meet.

The offer made in the early hours of Tuesday morning came after an offer of £150m made on Monday was also rejected for the same reason.

'We remain focused on protecting as many stores and jobs as possible, consistent with establishing a sustainable store portfolio in line with our previous guidance.

Lenders to Debenhams said the latest proposal, on the terms set out, was "not sufficient".

Suppliers, workers, pension holders and customers will also not be affected.

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Meanwhile, gift cards, outstanding orders and returns will still be honoured, but this is never guaranteed to last when a company enters administration.

The pension plans of its staff are protected, Debenhams said.

'We are in the process of writing to all members with further information and we will continue to keep them informed'. "The industry is evolving fast and it paid the ultimate price".

Debenhams' descent into administration is another blow to a retail sector already reeling from the collapse of BHS, music store HMV, electronics firm Maplin, department store House of Fraser and cycle shop Evans.

The high street chain has been hit by a sharp slowdown in sales, high rents and ballooning debts.

Landlords are likely to willing to talk to the new owners about the cost of leases - few department stores are looking for new premises now and the cost of converting their buildings to new uses is very high.

"With all of the bad news surrounding Debenhams, it is hard to see how the current situation can be reversed".

Debenhams workers in Lancashire were today facing an uncertain future.


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