Fifty branches have previously been earmarked for closure
Debenhams has collapsed into administration after a last-minute offer by Sports Direct and Newcastle United owner Mike Ashley was rejected.
The retailer’s lenders have now taken control of the company. Although its 166 stores will initially continue to trade, around 50 branches were previously earmarked for closure.
The news comes after it was revealed that Ashley had made an offer to underwrite a £200 million rights issue, on the condition he became CEO. This represented an increase on a previous offer to underwrite £150 million.
But Debenhams said in a statement on Tuesday that offer was "not sufficient" for the lenders.
Terry Duddy, Debenhams chairman, said: "It is disappointing to reach a conclusion that will result in no value for our equity holders.
"However, this transaction will allow Debenhams to continue trading as normal; access the funding we need; and proceed with executing our turnaround plans whilst deleveraging the group’s balance sheet.
"We remain focused on protecting as many stores and jobs as possible, consistent with establishing a sustainable store portfolio in line with our previous guidance.
"In the meantime, our customers, colleagues, pension holders, suppliers and landlords can be reassured that Debenhams will now be able to move forward on a stable footing. I would like to thank them all for their recent and continuing support."
FTI Consulting has now been appointed as administrators.
It is reported that they have now sold the group to a newly incorporated company controlled by its lenders in a pre-packaged administration. This will wipe out shareholders’ stakes in the company, including Ashley's 30 per cent stake in the company.
