Sheffield's Debenhams stores under threat as chain set to call in administrators

Sheffield’s Debenhams stores are under threat as the High Street chain store prepares to call in the administrators this week because of the financial pressure of the coronavirus crisis.

By Darren Burke
Sunday, 5th April 2020, 10:10 am
Updated Sunday, 5th April 2020, 5:23 pm

The department store chain, which has stores in Meadowhall and The Moor, is facing administration for a second time.

The retailer is set to appoint administrators early this week to protect the company against claims from creditors as it tries to restructure its business.

Debenhams has already closed 22 stores this year and plans to shut a further 28 in 2021.

Debenhams in The Moor.

However, the coronavirus outbreak has ramped up pressure on the firm with all 142 of its UK stores closed.

The business is still trading online, but stores have huge amounts of stock which cannot be sold.

A Debenhams spokesman said: "Like all retailers, Debenhams is making contingency plans reflecting the extraordinary current circumstances.

"Our owners and lenders remain highly supportive and whatever actions we may take will be with a view to protecting the business during the current situation."

It is expected that the most likely outcome is a pre-pack administration, where a company arranges to sell its business to a pre-determined buyer before administrators are appointed.

Last April, Debenhams fell into the hands of its lenders, comprising a group of banks and hedge funds led by US firm Silver Point Capital, after struggling for years to keep up with competition from rivals.

It has also faced rising costs in running its big stores as well as grappling with a huge amount of debt.