Debenhams raises ‘For sale’ sign to secure future

Debenhams is poised to appoint City bank Lazard to oversee a sale process and canvass potential buyers, The Mail on Sunday reported.

Debenhams hit the buffers for a second time in a year in April as the coronavirus outbreak led to the closure of stores during lockdown.

Other options being considered for Debenhams include bringing new investors on board alongside its existing backers or restructuring through a CVA, which would likely hit creditors.

Debenhams’ backers want to decide next steps in a matter of weeks and have it “done and dusted” by the end of September.

One source told the newspaper: “Lazard will be working closely with the administrator to find a positive, solvent outcome that works for all the creditors and which would draw a line under the current situation.”

It is thought that a Chinese consortium is among potential investors in Debenhams, which would also likely attract the interest of Sports Direct tycoon Mike Ashley, who controls rival department store business House of Fraser and whose investment in Debenhams was wiped out when it collapsed the first time.

However, a source close to Debenhams said it was still “very early in the process”.

It is thought that a liquidation of Debenhams’ main chain has not been ruled out if other options come to naught and administrator FRP decides that is the best way of returning cash to creditors. However, there is little appetite among creditors for that at present.