Debenhams secures £50m cash injection ahead of key trading period
Debenhams has secured an extra £50 million of funding to help the department store win over customers in the run up to Christmas, the company has announced.
Bosses said some of its current lenders, which took control of the company in April following its collapse into administration, had agreed to stump up the extra money on “substantially” the same terms as a £200 million loan in March.
Chief executive Stefaan Vansteenkiste said: “We are delighted that our investor consortium have reaffirmed their commitment to the business by making available additional financing support for our peak trading period.
“We are in a strong position to continue to invest in marketing and new product initiatives as we prepare for the important Christmas season.”
The money is expected to be used on marketing and promoting its Christmas ranges, with bosses particularly keen to take on Mike Ashley’s House of Fraser.
Ashley, who also owns Sports Direct, had been a constant thorn in Debenhams’ side, with the billionaire attempting to previously install himself as chief executive.
He was the biggest shareholder prior to its collapse, with a stake of nearly 30%, and had attempted to buy the business but only on the proviso he was the boss.
Debenhams rejected the advance, preferring to engage with its lenders – led by US hedge fund Silverpoint – who now control the business following a pre-pack administration in April.
It sought a Company Voluntary Arrangement (CVA) in May to reduce rents with its landlords, which the majority voted through.
However, one landlord, funded by Sports Direct, attempted to derail the deal by claiming in the High Court that the CVA was invalid. A judge dismissed the claim, allowing Debenhams to continue trading.