Debenhams is facing administration after the closure of its 142 stores due to coronavirus putting 22,000 jobs at risk
- Debenhams could file for administration as early as next week due to closures
- The coronavirus pandemic has forced the department chain to shut its 142 shops
- The group currently employs 22,000 staff, with all jobs now being put at risk
Debenhams, once the UK’s biggest department store group, could file for administration as soon as next week in a bid to protect its business from creditors during the coronavirus pandemic, Sky News reported.
Debenhams’ lenders took control of the retailer in April last year in an effort to keep stores open. They have since shut due to the outbreak. No one at the company was immediately available to comment.
It is understood that KPMG have been placed on stand-by to take control of the process if necessary.
Debenhams could file for administration as soon as next week, according to a Sky News report
According to the report, the company put the vast majority of its 22,000 workforce on furlough last week after the government’s lockdown measures were introduced.
When an employee is placed on furlough they are temporarily put on a leave of absence and not paid, although they remain on the payroll, meaning that they do not lose their job.
This could be because there is no work for these employees, or that the company is not able to afford to pay them, because of the effects of the coronavirus crisis.
In the United Kingdom, the Government is offering to pay 80 per cent of a furloughed employee’s wages, up to £2,500 per month, until they are able to resume their job full time. The Coronavirus Job Retention Scheme will last for at least three months from March 1.
In response to the Sky report, a spokesman for Debenhams said the retailer was making contingency plans reflecting the extraordinary current circumstances.
Debenhams has shut its 142 stores up and down the country due to the coronavirus pandemic
‘Our owners and lenders remain highly supportive and whatever actions we may take will be with a view to protecting the business during the current situation,’ he said.
‘While our stores remain closed in line with government guidance, and the majority of our store-facing colleagues have been furloughed, our website continues to trade.’
Despite it’s stores shutting, the chain’s website is still running and remains operational.