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Debenhams to challenge rates increase at Swansea store

Lauretta Roberts
25 August 2020

Stuggling department store chain Debenhams is challenging an increase in business rates at its Swansea store in what is viewed as a test case for other stores around the country.

The local tribunal concerns a 12% increase, which would take its bill for the store to £1.1m.  The company said it was facing an "unsustainable situation" where rents are going down and rates were going up.

Debenhams, which is currently operating in administration, has achieved rent cuts of up to 70% across its estate of 124 stores but faces a £60m rates bill after the current business rates holiday, introduced by the Government to support businesses through the coronavirus crisis, The Times reported.

In a statement the company said: “The Swansea hearing is a vital test case, with serious implications for jobs, both locally and across the UK. The outcome will go a long way to defining the future of every one of our stores."

Debenhams' administration (its second in a year) is being handled by FRP Advisory, which is also lined up to act as administrators for its parent company Celine Group Holdings.

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 for the first. It re-entered administration just after lockdown was imposed in the UK.

Bankers from Lazard have been appointed to oversee a sale process which could act as a potential exit from the administration but liquidators from Hilco have also been put on standby as a contingency.

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