NEWS

Debenhams denies CVA rumours, but says stores will close

Published on: 12th September 2018

Chain was reported to be considering CVA process used by House of Fraser and others.

The Debenhams chairman has confirmed the ailing retailer will close stores but denied that the company is actively planning to do so through an insolvency process.

Sir Ian Cheshire’s comments come after weekend reports that Debenhams was working with advisory firm KPMG on a company voluntary arrangement (CVA).

Debenhams would have been the 31st retail and restaurant chain to have launched a CVA since last year, as high street businesses wrangle with the switch to online shopping, combined with rising business rates and other costs.

Sir Ian told BBC Radio 4’s Today programme it was “simply not true” that Debenhams was “actively working” on a CVA. He said Debenhams had rushed out a trading statement on Monday in response to the media speculation.

Sir Ian likened this to “nosy neighbours” who had seen someone in a suit entering their house, assumed he was an undertaker “and by end of day you’ve got cause of death and everyone’s looking forward to the funeral”.

However, he admitted that Debenhams was likely to have fewer stores in future and was “working through what’s appropriate” in terms of closures over the longer term. The retailer said last year that it would close up to 10 stores and has already shut two.

Sir Ian also said that “capacity would leave the market” but insisted that Debenhams and the department store format in general was not dead as long as it continued to update itself for the 21st century.

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