Follow us


Debenhams’ administrators make over £7.2m from increased fees

Tom Bottomley
14 November 2022

FRP Advisory, the administrators of Debenhams who were appointed in April 2020 when the department store chain went bankrupt, have made more than £7.2 million in fees since the retailer filed for insolvency, according to The Times.

The administrator oversaw the sale of the department stores brand, intellectual property and website to Boohoo Group for £55m in January 2021, which also resulted in the closure of all Debenhams stores, the last of which shut for good in May 2021, after over 240 years of trading.

With an additional £1.9m received in remuneration by FRP Advisory between April and October this year, the total fees reportedly received since 2020 have been close to £7.3m.

The Times says that the administrators’ report reveals that FRP partners’ charges had increased from between £595 - £695 an hour to £640 - £740, while a junior professional and support staff rate had risen from £175 - £245, to £190 - £260.

FRP has reportedly told investors in an update that it expected to report a 10% increase in revenue for the six months to the end of October 2022.

At its trading height, there were over 150 Debenhams stores across the UK. However, the department store chain went into administration in 2019 after several years of declining sales and a failure to keep up with its high street competitors. The COVID-19 pandemic, with forced store closures during lockdown, proved to be the final blow.

In December 2020, it was announced the business was to be wound down with the loss of some 12,000 jobs.

In April this year, former Debenhams workers won a £350,000 lawsuit after an employment tribunal ruled that they had not received the statutory 30 day notice of termination.

The former employees claimed that their contracts were terminated without warning on the same day Debenhams announced that it would not re-open stores after lockdown restrictions eased. Former employees said they had been informed about their redundancy over text message and video calls. The pay-out was the equivalent of about eight weeks pay.

Retail Analyst, Richard Hyman, told “This isn’t the fault of accountants or insolvency practitioners. They can’t be expected to work for nothing. If anything, it’s the fault of the system and its structure. When a sizeable business needs shutting down, the people going in do so on the condition that they will be on top of the pile.

“Unlike anyone else who’s been caught out, who had already entered in to an agreement but perhaps have fallen foul of the company going bust, this is somebody (in this case FRP Advisory) who is entering into a commercial agreement with a company that’s already gone bust.

“Of course, when you come at it from the other end, it’s a really bad look, because the suppliers, staff, customers and HMRC are all going to lose out, but the accounting firm won’t. But they only do the work on the condition that, when it comes to divvying out the payments, they will be top of the list and be paid their usual rate. Why would they agree to do it at less than their usual rate?”

Free NewsletterVISIT