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Debenhams parent appoints FRP to advise on its own administration

Lauretta Roberts
24 August 2020

Debenhams' parent company, Celine Group Holdings, is reported to have appointed FRP Advisory to advise on its own administration.

Newspaper reports over the weekend say Philip Watkins and Philip Armstrong from FRP have been drafted in meaning that it will no longer pay overdue interest on £200m of bonds which had been due on 15 July.

Debenhams' operating facilities were sold to Celine UK Newco 1 Limited, controlled by a consortium of its investors, last year when the department store was placed into administration.

An administration of Celine would not impact Debenhams' sales, staff or its suppliers. But Debenhams itself was placed into administration in April, a move it said would protect its interests during the COVID-19 lockdown.

It has also appointed bankers from Lazard to explore the possibility of a sale of the chain as a means by which to exit its current administration, although last week it was revealed that liquidators had also been lined up in the background as a contingency.

FRP Advisory is also handling the administration of Debenhams and restructuring firm Hilco has been appointed to work on a liquidation should plans to sell the business fail. Industry watchers believe it unlikely that Debenhams would be sold as a going concern.

The retailer has reopened 124 of its stores, having permanently closed 18, and insisted they were trading strongly. Two weeks ago it announced 2,500 redundancies across its stores and warehouses, scrapping the roles of sales manager, visual merchandise manager and selling support manager as part of a management restructuring process.

It has been reported that Frasers Group is interested in acquiring up to 30 Debenhams stores, though it is not clear if these are sites already vacated by, or soon to be vacated by, Debenhams.

Frasers chief Mike Ashley famously tried to take control of Debenhams before its investors initiated its pre-pack administration last spring. At the time Ashley was said to have been keen to merge Debenhams with the House of Fraser chain, the he had bought our of administration in 2018, however his offers of investment and his bids were repeatedly rebuffed by the investors, led by Silverpoint Capital.

It is understood that Ashley, whose empire includes Sports Direct, Flannels, Jack Wills and USC, has cooled on the idea of taking over the entire Debenhams chain.

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