Euronews is no longer accessible on Internet Explorer. This browser is not updated by Microsoft and does not support the last technical evolutions. We encourage you to use another browser, such as Edge, Safari, Google Chrome or Mozilla Firefox.
BREAKING NEWS

Debenhams says rescue plan on track after court backing

Debenhams says rescue plan on track after court backing
FILE PHOTO: Shoppers walk past the Debenhams department store on Oxford Street in London, Britain December 15, 2018. REUTERS/Simon Dawson/File photo -
Copyright
SIMON DAWSON(Reuters)
Euronews logo
Text size Aa Aa

(Reuters) – British department store group Debenhams said on Thursday that its company voluntary arrangement (CVA) will go ahead as planned after a court rejected challenges to the rescue plan.

Once the country’s biggest department store chain, Debenhams has been hit by a sharp slowdown in sales, high rents and ballooning debt, plus a power struggle with former shareholder Mike Ashley’s Sports Direct.

Debenhams’ lenders took control of the retailer in April in an effort to keep stores open. The retailer is restructuring using a CVA, which allows retailers to avoid insolvency by offloading unwanted stores, securing lower rents on other stores and reaching a compromise with creditors.

Debenhams said on Thursday, the challenge to its CVA was rejected on four of the five grounds, and the remaining has been addressed by the deletion of a technical provision relating to landlord forfeiture.

“Our proposals had unprecedented levels of support from our landlords and today’s outcome is good news for our 25,000 employees, our pensioners and suppliers,” Chief Executive Officer Stefaan Vansteenkiste said in an email.

“We retain the support of our lenders, and everyone at Debenhams can continue to focus on trading ahead of the important Christmas period,” he said.

The CVA was earlier challenged by Sports Direct and M&G Real Estate.

(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Shailesh Kuber)

euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on euronews.com for a limited time.