Debenhams to ask for more cash before year-end - report
Debenhams’ claim that it now has the set-up and cash to push forward with its recovery plan may come with a few caveats on news that the retailer could be seeking a £50 million cash buffer before the end of the year. It comes as it prepares for what’s likely to be a tough Christmas trading period.
The company is currently owned by a consortium of its lenders, including hedge funds and banks, after its April administration filing. It was thrown a £200 million lifeline by the consortium in May.
Official statistics this week that showed UK department stores continuing to struggle, as well as rival House of Fraser’s highly public ongoing woes, both underline the difficulties facing the sector in which Debenhams operates.
And sources said the retailer has faced weak trading in recent months with the Christmas period also set to be challenging. A cash injection could help Debenhams through this period and allow it fund the promotional pricing that’s likely to be a necessity.
But those same sources told Sky News that the extra cash call doesn’t mean the retailer has run through the £200 million already provided. While the firm might need the new cash as soon as the autumn, it’s reportedly trading within its targets and its lenders remain supportive of its turnaround plan.
And there’s plenty at stake with this turnaround given that the company operates 166 stores (at least 22 of which are to close) and even after the closures, more than 20,000 jobs will be directly dependent on the business.
The company is also reportedly close to naming a new CEO, a post that has been vacant since Sergio Bucher exited in April. Reports said there are two candidates in the running and while ex-Superdry CEO Euan Sutherland had been seen as a frontrunner, he’s not thought to be on the shortlist. The Guardian reported that Stefaan Vansteenkiste, a turnaround expert, is believed to be a contender.
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