Debenhams has called on KPMG to help it review all options for the future of its business. It is being suggested that one of those options could be a CVA which would be used to reduce rents as well as close under-performing stores. Landlords and suppliers will be very unlikely to co-operate given that many are still trying to recover from major losses incurred via House of Fraser’s demise. Debenhams has already entered into a redundancy consultation with some 200 employees in a bid to slim down its management teams and contribute to a targeted £20 million saving on operating costs. It will however need to do much more than this to survive.
It is being mooted that Mike Ashley is ready to mount a takeover bid for Debenhams with a view to merging it with House of Fraser. Ashley already holds close to 30 per cent of the shares in Debenhams but would likely face stiff competition from Philip Day who recently withdrew all of his brands’ concessions from all House of Fraser stores following his failed bid for the HoF group and inability to agree terms with Ashley going forward. Day’s brands include mature department store shoppers’ favourites like Austin Reed, Berwin & Berwin, Jaeger, Jacques Vert, Precis, and Dash.
Meanwhile, a 100 page catalogue bearing its new re-positioning slogan “do a bit of Debenhams” was distributed via the weekend press offering free next day click and collect for spends of £30+ and pushing Autumn fashion, accessories, cosmetics and home-wares. This forms part of its turnaround plan which involves restructuring around three business units, beauty and services, fashion and home. The questions now are whether time has run out for Debenhams in its present form, or if it can be saved, at what cost to suppliers, and by who.
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