EMBATTLED department store Debenhams is said to be in urgent talks over a further restructuring plan that could involve more store closures.
The high street chain has ramped up discussions with landlords due to the coronavirus outbreak.
Debenhams' lenders, which took control of the retailer last year, are unwilling to provide further funding without landlords agreeing to rent cuts and a five month rent and service charge holiday, the BBC reported. The company has marked 28 stores to close next year, after shutting 22 so far as part of a restructuring plan.
However, it has been forced to revise its turnaround plan due to the coronavirus pandemic, which has caused sales to plummet.
The new proposals could reportedly take the form of a company voluntary arrangement (CVA) — a controversial restructuring plan often chosen by retailers — which would be the department store chain's second in less than a year.
Debenhams' sites are currently closed after the government issued an order for all nonessential retailers to shut during a UK lockdown to slow the spread of coronavirus.
Debenhams declined to comment on the restructuring plans.
The high stret giant fell into the hands of its lenders in April last year, a consortium of banks and hedge funds led by Silver Point Capital.
The BBC reported that Debenham's lenders are unwilling to extend credit to the retailer, unless they are assured that landlords will accept more rent cuts.
They are also said to be seeking a fivemonth rent and service charge holiday as part of the negotiations. Landlords appeared unwilling to accept the request, with one telling the broadcaster: "They're asking us to accept a deal on rent and service charge based on a percentage of the turnover but in reality, what they're offering would only just cover the service charge and a little bit of the rent."
(c) 2020 City A.M., source Newspaper