Debenhams taken over via a pre-pack deal
The fight for Debenhams has been brought to a close by administrators from FTI Consulting. The deal which many consider to have been 'engineered' months ago, sees Debenhams pass into the ownership of its secured lenders, banks and hedge funds, at the expense of its shareholders.
The future for the department store chain which had said, last year, that it would be closing 50 of its under-performing stores remains somewhat uncertain. There have been statements to suggest that all of the stores will continue to trade to the end of the year and that employees, pension holders and suppliers will not be affected, but it is expected that its new owners will seek to shutter as many as half of the Debenhams stores and attempt to return it to profitability for swift onward sale. Debenhams has been reported to have held discussions with store landlords to try to secure rent reductions and speculation continues that a CVA could well remain on the cards to expediently shed the unwanted stores.
As has been widely covered, Mike Ashley's Sports Direct had worked to mount a takeover which was been rejected. With its significant stake in Debenhams now rendered worthless, many expect that Sports Direct will seek to expose any alleged impropriety on the part of the parties involved in the management of Debenhams and in its administration and pre-pack sale.
A statement from Sports Direct said: "Sports Direct will not stop in its quest to get to the bottom of this appallingly managed process and to find and to hold to account those responsible for this final turn of events. This is a tragedy. There is no other way of putting it, especially when a long term solution was there for the taking." With Mike Ashley adding; "Whilst these hedge funds look to close a significant number of stores and out thousands of people out of work, as politicians and regulators look on, I will go to the ends of the earth to save as many Debenhams stores and jobs as I can. I call on the authorities to reverse the administration process so that a full, better and appropriate solvent solution can be found."