Bankrupt Debenhams will have any workable takeover offers in hand when the clock runs down on Tuesday.
The deadline for bids was set by its investment banker, Lazard, according to a published report from Sky News, which said the time frame will help Debenhams administrator FRP Advisory wrap up a sale by the end of September.
The U.K. high-street fashion retailer filed for administration, the equivalent of a bankruptcy filing in the U.S., in April, with Debenhams stores in Ireland already liquidated but Scotland locations operational since July. The filing represented the second time the retailer fell into insolvency within the past year after lenders took over in April 2019, and marked the third in its 242-year history.
In July, Debenhams put itself up for sale, hoping to secure a new investor and skirt an outright liquidation and shutdown. Lenders include U.S.-based private equity firm Silver Point Capital and Britain’s Barclays bank.
Last month, Debenhams slashed 2,500 jobs across its department stores and warehouses, on top of the 4,000 job cuts announced in May. Meanwhile, Marks & Spencer plans 7,000 cuts over the next three months, joining Harrods, John Lewis and Selfridges in eliminating headcount.
Debenhams last month hired Hilco Capital to work up a liquidation plan as a back-up in case it can’t find a buyer. And there’s a possibility that Mike Ashley of Frasers Group might make another attempt to acquire all or parts of the chain. He tried last year in the 2019 insolvency, but was beaten out by the retailer’s lending group. But that was before the coronavirus pandemic, and Frasers Group is currently in the middle of a battle with landlords to restructure lease terms. He’s trying to change the monthly fixed-rent payments over to a percentage of retail sales. Moreover, if his firm’s most recent acquisition of 71 locations of a gym and sports retail competitor is any hint, Ashley might be more interested in certain Debenhams store locations than in buying the entire chain.
The distressed retailer operates over 120 stores in the U.K., as well e-commerce. Debenhams also has operations via franchise agreements in 17 countries.