Debenhams bid deadline was set for close of play today

Potential bidders for distressed department store chain Debenhams were given until 5pm today to submit their bids.

The business was placed into administration during lockdown and has since re-opened 124 of its stores but bankers from Lazard were appointed to sound out potential buyers as a way to exit the administration. Liquidators from Hilco were also placed on standby.

Reports from Sky News and The Times say the deadline for bids passed at 5pm today with administrators from FRP Advisory looking to complete a sale process, should one go ahead, by the end of the month.

If a sale fails to materialise FRP will look at alternative routes, which could result in the loss of thousands more jobs. Debenhams currently employs around 12,000 staff, having already cut 6,500 jobs since the beginning of the COVID-19 crisis.

The company has insisted that it is trading well and is in a strong cash position since lockdown. Even if a sale does go ahead it seems likely that many stores will be closed. According to Sky News an "illustrative scenario" was included in the sale prospectus under which half of Debenhams' UK estate would be liquidated with the business potentially recording profit of up to £90m in the year ending February 2022.

Frasers chief Mike Ashley had fought hard to take control of Debenhams at the end of 2018 and in early 2019 but his overtures were rebuffed by investors, who ended up forming a consortium called Celine and buying the business in a pre-pack administration themselves last Spring. Ashley called the move a "national outrage" at the time.

However, with his hands full turning around his own department store chain House of Frasers, Ashley is understood to have cooled on the idea of buying Debenhams as a whole but is said to be interested in up to 30 stores.

It is unlikely any one bidder will want all of the stores and Next and a Chinese consortium are said to be interested in some sites. Next is already taking over three former Debenhams stores in Intu centres to convert into its new Beauty Hall from NEXT concepts, along with five former Debenhams sites in Hammerson properties. 

Last week respected retail industry analyst Richard Hyman told TheIndustry.fashion that Debenhams was being propped up by emergency support provided by the Government to help retailers survive the pandemic. “When the cost holiday is over, Debenhams is going to be unviable. It is, effectively, trading cost-free,” he said.

Read our recent analysis Can Britain's Department Stores Survive the Pandemic here.