BUSINESS NEWS - British department store chain Debenhams is set to declare bankruptcy for the second time in a year, the group said Monday amid a coronavirus lockdown that has ravaged the nation's retailers.
Debenhams, whose history dates back to the late eighteenth century, said in a statement that it will file for bankrupcy and appoint administrators FRP to run the company, whose 142 department stores in Britain have been shut since the lockdown was declared last month.
The retailer, whose 22,000 employees are mostly on Britain's so-called furlough scheme under which the government pays 80 percent of salaries at virus-hit businesses, added bankruptcy would wipe out debt before management buys it back.
"The group is preparing to enter a 'light touch' administration that will see the existing management team remain in place under the direct control and supervision of the administrators," the statement read.
It added: "This move will protect Debenhams from the threat of legal action that could have the effect of pushing the business into liquidation while its 142 UK stores remain closed in line with the government's current advice regarding the COVID-19 pandemic."
Debenhams had already fallen into administration around one year ago in the face of fierce online competition and Brexit uncertainty - but Britain has since left the European Union, on January 31.
Administration refers to the process whereby a troubled company calls in outside expertise to try and minimise job losses.
Many British high-street retailers are now struggling in the face of the coronavirus crisis, which sparked a lockdown on March 23.
Long-struggling clothing and household goods retailer Laura Ashley Holdings collapsed into near bankruptcy three weeks ago as refinancing talks failed on coronavirus turmoil, risking 2,700 jobs.