Debenhams turns to KPMG to secure its future
Struggling department store chain Debenhams has called in advisers from accountancy firm KPMG to help it investigate a range of options for its future that are said to include a company voluntary arrangement (CVA).
Debenhams turns to KPMG to secure its future
f it were to go down the route of a CVA, Debenhams would be declared insolvent but continue to trade to pay back creditors over a fixed period, subject to their agreement. This could entail store closures and renegotiations of rent but would only be entered into as a last resort, with very few of its 170 stores actually loss making.
House of Fraser entered into a CVA earlier this year.
Other options on the table include the sale of its Scandinavian department store chain Magasin du Nord, which could generate around £250m and a shift in focus towards the food and beauty sectors coupled with improvements to its online platform.
Debenhams is currently in the midst of a turnaround plan as it seeks ways and means of reducing costs and increasing sales as it adjusts to an increasingly hostile high street trading environment.
In a statement Debenhams said: “Like all companies, Debenhams frequently works with different advisers on various projects in the normal course of business.”
Debenhams has already issued no fewer than three profit warnings this year, shedding around 400 store management and headquarters roles as it seeks to balance the books.
Debenhams last week rolled out fresh branding in an effort to avoid a similar fate to House of Fraser, now under the control of Mike Ashley.
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