Funds will be added to a £200m lifeline already secured as part of a restructuring deal.
The ailing department store Debenhams, which is owned by a consortium of banks and hedge funds after falling into administration in April, has asked its lenders for an additional £50m cash buffer as it braces itself for a difficult Christmas period.
Although Debenhams is reportedly finding trading tough – arguably along with the rest of the high street – it is trading within its cash targets and has not reached the limit of its funding package. Sources said Debenhams’ lenders remained supportive of the company’s turnaround plans.
Debenhams, which employs more than 20,000 staff, is set to close at least 22 of its 166 UK stores in January with the loss of about 4,000 jobs. It has already forced through rent cuts on many others as part of the survival plan approved by creditors.
The retailer is close to announcing a new chief executive to replace the former boss Sergio Bucher, who was ousted in April. The board is understood to be considering a shortlist of just two contenders, thought to include Stefaan Vansteenkiste, a turnaround expert and managing director of consulting firm Alvarez & Marsal, who was brought in to help the business in April. However, the other candidate is not Superdry and former Co-op boss Euan Sutherland, who had been widely tipped for the job.
Debenhams is thought to want the £50m cash buffer to help it trade through Christmas. It could fund a wave of price cuts as the retailer fights for market share in a tough market, according to Sky News, which first reported the fundraising bid.